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Company Archive, or Black Hole?

A well-run records system saves time—and could save your bacon in a lawsuit.

Recently, I learned that a global manufacturer received a multi-million-dollar settlement because its legal team constructed a case, in part, from the records and photographic negatives pulled from its corporate archive. People familiar with the matter – including one of the archivists – say maintaining the collection and properly tagging the contents was critical for successfully representing the company.

When manufacturers think about their archive, the thoughts range from “we’re actively archiving and meta-tagging everything” to “that would be a room, maybe several rooms, with a lot of boxes.”

Like insurance, people think of an archive or document repository only when it’s needed. For example, an engineer might tap the archive, be it a room or server, to locate and find historical drawings to review past decisions to improve future designs. But imagine the frustration and missed opportunities (and potential legal issues) that arise if assets aren’t easily located or preserved.

As a lawyer, I have a vested interest in the contents of my client’s archive and the ability to easily access its contents.  I always advise clients at the outset of any representation on the risks of not preserving documents and information that may be relevant to the case.  For example, “spoliation” is the legal term for the alteration or destruction of a document either intentionally or negligently. In my experience, a manufacturer can face significant consequences in court, and severely prejudice its defense, if it knew or should have known certain documents were relevant to potential or actual litigation, and intentionally or accidentally destroyed them (or couldn’t find them).

I represent manufacturers of all kinds. I can tell you a company’s archive is among the primary sources for electronically stored information and other forms of hard-copy discovery, a very common part of litigation. Every manufacturer, in theory if not practice, should have a uniform system and policy for organizing and preserving its documents. I often see factories and plants owned by the same entity, each with their own rules and approaches to archiving.

The unintended cost of finding what you own

I’m working on litigation now that involves a blockbuster effort in terms of document collection and review. Several years ago, the client decided to move to an entirely new database for managing and storing its records. That break in continuity led to different methods of record-keeping and a de facto failure to wholly transfer or otherwise preserve documents from the legacy system to the new database. IT specialists inside the company (and a vendor we’re working with) are spinning their wheels searching through multiple pots of information. At the time the database was moved, it may have seemed that the team was improving the company’s storehouse of and access to discoverable information. In hindsight, the move caused unintended administrative and legal costs.

John DiGilio is a library information expert and attorney who is also vice president of Research & Information Services for LAC Group, a provider of knowledge and information services. According to DiGilio, when it comes to products liability cases, in virtually every situation, one of the biggest expenses is harvesting and collecting documents. As product lines age, there become several vintages, associated design changes, engineering specifications and owner’s manuals. Any of these assets, including all communications between employees discussing a company product, could help create a defense against a legal challenge. A well-organized and actively managed archive, says DiGilio, is clearly the way to lay hands on the assets, and a hedge against legal costs and potentially significant liability exposure.

Professional management for a reason

Active archival management is more than grabbing a person who’s already on staff, often a clerk or administrative team member, to dutifully stack boxes and organize digital files in a superficial, ad hoc way. At a minimum, say experts, the archive manager must create and enforce retention policies.  According to Neil Dahlstrom, vice-chair of the Business Archives Section of the Society of American Archivists, an archive manager should be a person who has:

  • A history background, with concentrations and often advanced degrees in areas such as archives, museum studies or library sciences
  • Skills like budgeting, marketing and project management, and
  • An ability to listen well, build good working relationships and exchange ideas with others.

DiGilio adds that a manufacturer should tap someone who has “skills as a professional librarian or researcher because the person needs to understand metadata, which is data about data, and the science of search and retrieval.”

According to Dahlstrom, archivists have responsibilities for managing analog-based records, digitizing and managing copies of records for access and preserving records created digitally. So, the technology a manufacturer chooses to underpin its archive can simplify or complicate a situation. Critical technologies for the intake, search and disposal of documents include:

  • Cloud services for storing assets
  • Content services platforms for standardizing the indexing of documents, and
  • Records management solutions to replace spreadsheets and automatically apply rules for how long records stay on file.

“I suggest in-text searching and audio search, but often find that quality ‘finding aids,’ written for the right audience, go a long way,” Dahlstrom notes. “It’s a great filter, which is more necessary as the volume of records grows exponentially.”

My attitude toward organizing a manufacturer’s archive is from the angle of legal discovery and evidencing defense themes. I might file documents according to product names, series, and models. That’s a basic concept that could make retrieving documents easier for a legal team. But that convention may complicate retrieval for an engineer or industrial designer accessing the same archive for a different purpose.

“Take a holistic approach and create a retention policy,” says DiGilio. “Audit the collection and get buy-in from business leaders and employees to develop a system and ensure compliance.”

Managers know how important processes are for ensuring quality, safety and, ultimately, profits in a plant. Implementing controls and polices are no less important for handling records. For manufacturers, an archive can be an albatross or an asset.

Ryan Lucinski, partner at Hodgson Russ, is a trial lawyer who represents manufacturers and suppliers in liability lawsuits; a variety of businesses in commercial litigation; and public and private sector employers in lawsuits involving state and federal discrimination and harassment claims.

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