Electronic Records Management: What You Don't Know Could Hurt You
By Adam Wilburn
Universal Advisor, 2005 Issue No. 3

If you needed to reference a letter you’d written to a customer five years ago, could you find it? Most companies would say yes. Organizations are notorious for keeping detailed records of business history; in extreme cases, they can go back hundreds of years. For paper-based records, that is. Not necessarily for e-mail and other forms of electronic content.

Which begs the question: Why? After all, 250 megabytes of content are produced every year for every person across the globe, 600 billion e-mails are generated, and 2.1 billion website pages are created. E-mail is no longer in its infancy; in fact, it’s considered mature when compared to newer content technologies, such as discussion forums, blogs, wiki, instant messaging, and text messaging. Yet 59 percent of U.S. companies have no e-mail retention policy, and of organizations that use instant messaging, only 6 percent have any mechanism to archive or maintain those communications.

That has to change. One in five U.S. companies had employee e-mail subpoenaed in 2004, a 6 percent increase over the previous year. Organizations that are unable to comply are facing stiff penalties. Don’t let it happen to you.

It’s unrealistic and unnecessary to retain everything within an organization. Just as you wouldn’t keep every scrap of paper that comes through your organization, you won’t be archiving every e-mail. The idea is to keep and maintain specific information, or “records,” relevant to the organization.

A “record” is defined by the International Council on Archives (1996) as “recorded information produced or received in the initiation of an institutional or individual activity and that comprises content, context, and structure sufficient to provide evidence of the activity.” This definition is all encompassing — it’s just as relevant to e-mails and instant messages as it is to the paper documents we’re so meticulous about archiving.

This is not an industry-specific phenomenon. While it’s true that industries such as financial institutions, health care, and government are more highly regulated than other industries, this is a real issue for every organization. No one is exempt from litigation and the need to produce records — including electronic records — related to specific cases.

An example: In May 2005, Morgan Stanley was ordered to pay $1.4 billion in compensatory and punitive damages in a case involving fraud. A substantial element to the case was the fact that although the company ordered the preservation of paper documents, they continued to overwrite e-mail that, according to the SEC, was supposed to be preserved for two years.

So what do you do? How do you maintain electronic records? There’s no easy answer, no magic solution to this question. Part of the problem is that different rules apply depending on a number of organizational attributes, such as size and industry. Rules related to records retention come from a variety of sources, including state, federal, local, and international government legislation; taxing authorities; the SEC; industry groups; and individual business requirements. All these rules must be understood and followed, or organizations risk the cost of non-compliance.