Although law firms and legal departments may specialize in legal guidance and counseling, there nevertheless laws that the legal industry itself must be mindful of in their practice when it comes to legal document management, storage, and scanning.
Primarily impacting how companies and businesses from varying ends of the work spectrum must properly handle, store, and otherwise manage the sensitive information pertaining to their daily work, laws ranging from the Sarbanes-Oxley Act to HIPAA extend their reach to encompass the legal industry as well.
Here, we take a closer look at some of the major laws impacting legal practices today—providing not only breakdowns and summaries of what these document management laws mean to the legal industry, but also tips and insight on how law firms, legal departments, and other organizations can handle their legal obligations with the help of legal document management services.
The Sarbanes-Oxley Act of 2002 (SOX)
In the most basic sense, the Sarbanes-Oxley Act was passed by Congress in 2002 with the purpose of establishing more rigid guidelines for how companies both public and private retain, store, and destroy financial records.
Under SOX, the “records” a law firm or other business is required to securely manage is broadly defined, and although SOX largely impacts publicly-traded companies primarily, its application spills over to private organizations like law firms with specific retention periods for document types as well under Section 302.
Among others, legal documents and paperwork including bank statements, legal correspondence, and customer or vendor invoices are just a few of the numerous record types the legal industry must be mindful of due to SOX, as their retention periods can range from 3 years all the way to permanent retention. Find a full list of documents and their generally accepted retention times here.
Compounding the already massive inventories of legal documents and case files a legal practice may need to keep for later reference, SOX makes the need for law firms and legal departments to have a clear-cut document retention and destruction policy.
Including not only safe legal document management and storage for sensitive information needing keeping, this also means law practices must develop ongoing shredding processes for documents that reach retention times or are no longer needed to also ensure the disposed information remains protected.
The Health Insurance Portability and Accountability Act of 1996 (HIPAA)
HIPAA is a wide-reaching law applying to healthcare and patient privacy. In essence, HIPAA requires handlers of patients’ protected health information (PHI) to ensure these sensitive records remain private, or face severe financial penalties.
Ranging from $25,000 civil fines to $250,000 criminal penalties with prison time included for failure to comply, adherence to HIPAA is a major priority for companies in the healthcare industry—however, with the addition of the HIPAA Omnibus Rule made effective in 2013, the pool of covered entities who HIPAA applies to has been expanded significantly.
Now including and directly applying to HIPAA-defined business associates like attorneys and law firms, under the latest updates to HIPAA business associates are also required to comply with all applicable HIPAA provisions for protecting PHI.
Because HIPAA applies to PHI both in physical papers and digital health records (ePHI), it’s important for law firms to take a top-down approach to managing sensitive information.
For hard-copy paperwork, it requires a storage place where the information is not only secured from theft and misuse, but also free from environmental hazard. Although storing in filing cabinets on site is still an option, this still carries potential risk for misplacement or accidental disposal, and is substantially more work to handle—leaving many firms in similar positions to turn to off site records storage options.
When it comes to ePHI, this information can be stored using legal document management systems (DMS). Significantly boosting security, legal documents are encrypted and password-protected when managed with legal document management software—making a legal DMS an ideal solution to ensure compliance with HIPAA and other legal document management laws.
The Health Information Technology for Economic and Clinical Health Act of 2009 (HITECH)
Building on HIPAA’s addition of the Omnibus Rule which now also makes law firms and legal associates also responsible for protecting PHI, HITECH works to hold those who fail to comply with HIPAA standards publicly accountable while also widening the scope of privacy and security protection requirements under HIPAA.
Creating a set of security breach notification requirements, a major change introduced by HITECH requires all who work with PHI (including covered entities like law firms) to notify all affected parties in the event of impermissible disclosure, use, and breach of PHI.
As a result, the importance of protecting and safely storing this information—whether in hard-copy format at an off site records storage location or using legal document management software—is critical for the legal industry.
Not only does unauthorized use and disclosure of patient health information come with steep fines for a law firm, but can also cripple a reputation once reports of carelessness with sensitive information become public—making it essential law firms take appropriate action now to avoid long-term consequences down the road.
Need a Reliable Option for Ensuring Your Practice’s Compliance? Get Free Quotes on Legal Document Management Solutions Today
Among the countless laws and legal obligations that attorneys, law firms, and legal departments keep track of, perhaps the most important are the legal document management and storage laws like SOX, HIPAA, and HITECH that can spell serious trouble for themselves.
At Record Nations, we partner with a nationwide network of the top providers in legal document management solutions. With options ranging from secure off site records storage services for massive legal libraries, to document scanning, conversion, and implementation of legal document management software, we strive to connect you with a customizable solution to suit your needs.
To learn more any of our available legal document management services or for more information on scanning and document storage laws, simply fill out the form at the right of your screen for a free quote from a local provider in your area, or just give us a call at (866) 385-3706 today!
Additional Resources
Legal Document Management, Storage, and Scanning: Maximizing Practice Productivity
Managing large archives of legal records and litigation documents is a necessary evil for law practices, and yet traditional methods of storing paper files in house can be one of the largest detriments to productivity. With this in-depth white paper, we take a closer look at the alternative legal document management and storage options available to the industry today to help firms and practices find information governance solutions that provide maximum efficiency.
Is Off Site Records Storage the Right Solution for Legal Document Management?
When law firms and practices are either establishing or re-evaluating their document management processes, the first question to ask is whether you plan to store and manage paper or digital legal documents. While either option offers benefits and boosts to work efficiency, use this article to find out if an off site legal records storage solution best suits your work or practice.
