Can a New York lawyer store client data on off-site backup tapes, and can electronic copies satisfy the record-retention rules?

Plain-English summary

A firm scans all documents into an electronic case-management system, backs the data up daily to tapes, and stores the tapes off-site (presumably with a commercial provider) so that no more than one day's data would be lost in a catastrophe. The committee answers two questions: whether the lawyer may use off-site backup tapes for confidential information, and whether electronic copies can satisfy the rules' record-retention obligations.

On the backup tapes, the committee applies Rule 1.6(a) (a lawyer shall not knowingly reveal confidential information) and Rule 1.6(c) (reasonable care to prevent disclosure by others whose services the lawyer uses). It extends the framework of N.Y. State 842 (2010), which permitted cloud storage if the lawyer takes reasonable care that the system is secure: a lawyer may use off-site backup tapes if the lawyer exercises reasonable care to protect confidentiality, for example by ensuring the provider has an enforceable obligation to preserve confidentiality and to give notice if served with process, and by investigating the provider's security measures and recoverability methods.

On retention, the answer turns on the type of record. For most records listed in Rule 1.15(d)(1), keeping "copies" suffices; but the items in Rule 1.15(d)(1)(viii), such as checkbooks, bank statements, prenumbered canceled checks, and duplicate deposit slips, must be kept in original form for seven years if the firm receives or initially maintains them on paper in the ordinary course (the lawyer need not, however, undertake extraordinary effort or expense to obtain paper copies, per N.Y. State 758 (2002)). Records that may be kept as copies may be kept electronically only in a format that preserves an image that cannot be altered without detection (Rule 1.15(d)(3)). The committee adds that other retention duties exist outside Rule 1.15 (citing N.Y. State 623, 460, and N.Y. City 2010-1, and noting originals of wills, deeds, contracts, and promissory notes may need preservation), and whether electronic copies satisfy those also depends on the record.

In practice

The opinion holds that, under the New York rules as they stood in 2012, off-site backup tapes are permissible with reasonable care over the provider and the system's security, and that the record type controls retention: paper-original items under Rule 1.15(d)(1)(viii) received on paper must stay on paper, copy-eligible records may be electronic only in an unalterable-image format under Rule 1.15(d)(3), and some records (where only the information, not the document, matters) carry no format constraint. The committee identifies the controlling factor as the category of the specific record, and notes consulting an IT specialist may be appropriate where a format's compliance is unclear.

Common questions

Q: Can a lawyer keep client files only on off-site backup tapes?

A: Yes, with reasonable care. Per paragraphs 6 and 15, a lawyer may use off-site backup tapes if the lawyer takes reasonable care that the arrangement protects confidentiality, applying the cloud-storage framework of N.Y. State 842.

Q: Can scanned copies replace paper bank records?

A: Not for the items in Rule 1.15(d)(1)(viii). Per paragraphs 9 and 12, canceled checks, bank statements, and deposit slips received on paper must be kept in original form for seven years.

Q: For records that can be copies, what electronic format is acceptable?

A: One that cannot be altered without detection. Per paragraph 11, Rule 1.15(d)(3) requires a medium preserving an image that cannot be altered without detection, such as optical imaging.

Background and rules framework

The opinion interprets New York Rule 1.6(a) and (c) (Model Rule 1.6, confidentiality and reasonable care to prevent disclosure by others) and Rule 1.15(d) (Model Rule 1.15, required records, the seven-year retention period, and acceptable media). It extends the cloud-storage reasonable-care standard of N.Y. State 842 to off-site backup tapes.

Citations and references

Rules of Professional Conduct:

• MR 1.6 / NY Rule 1.6(a), (c) (confidentiality; preventing disclosure by others)
• MR 1.15 / NY Rule 1.15(d)(1), (d)(1)(viii), (d)(3) (required records; original-form items; acceptable media)

Other opinions cited:

• N.Y. State 842 (2010): reasonable care for cloud/online storage of client information.
• N.Y. State 758 (2002): no extraordinary effort required to obtain bank items in paper form.
• N.Y. State 623 (1991), N.Y. State 460 (1977), N.Y. City 2010-1: retention obligations outside Rule 1.15.

See also

• NY State Bar Op. 950: Destroying paper mail and keeping electronic copies
• NY State Bar Op. 939: Sharing a computer in shared office space
• NY State Bar Op. 1020: Cloud storage for sharing transaction documents

Source

• Landing page: https://nysba.org/ethics-opinion-940/