Law Practice Essentials

Regulatory provisions govern record retention by lawyers. Rule 119.35(1) of the Rules of the Law Society of Alberta (the Law Society Rules) provides that certain financial records, trust ledger accounts and file contents that support the financial records must be retained for a minimum of ten full years. Paper copies are not required, but the records must be stored in a format that is retrievable on demand.  

Law firms must comply with two rules about its prescribed financial records.  Rule 119.34(4)(b)(ii) stipulates that the trust ledger and accounts receivables ledger for every client matter must be kept for a minimum of ten full years. Rule 119.51(3)(b) requires the firm to retain the client’s identification information and verification documents for at least six years following completion of the work for which the lawyer was retained. This obligation must be balanced with relevant privacy legislation which stipulates that records should not be kept longer than required.  

Statutory provisions also govern record retention. As discussed above, original documents should be returned to the client. Because clients might resist having records returned to them, it may be effective to send a letter advising clients of statutory provisions which require the return. If the client has provided instructions to retain records until the statutory requirements are fulfilled, best practice would require the lawyer to confirm that agreement in writing and address issues such as the cost of retaining and storing the file.  

The Income Tax Act requires financial records to be maintained for six years from the last taxation year for which the record may be required for a determination under that Act. These requirements should not be confused with lawyers’ file retention obligations under the Law Society Rules.