Converting to Paperless: A Trust and Estates Attorney's Perspective

by Merwyn J. Miller, J.D.

Encinitas, California

The Issues to be Dealt With and the Priority List

The urge to keep getting rid of paper

This article is published with the concept that anyone who uses any of the ideas presented does so at his own risk and will obtain competent professional assistance and guidance in setting up a "paperless" system. This is particularly applicable to security and backup. In other words, I will not be responsible for business interruption, loss of business, or anything else if any of the ideas presented don't work out as desired. By reading or using any of the ideas in this article you agree to the above!

Early 2002 I came to the conclusion that I was absolutely bursting at the seams in paper and I needed to do something. My practice is one of Estates and Trusts almost exclusively. About a 50/50 blend of Estate planning (EP) and Estate Administration (EA). Many of my EA files were thick and getting thicker. I was having trouble finding anything in the file despite a rationally good indexing system in the folder. And worse, my wife was getting upset because as cases closed, they'd go to the archives (i.e. laundry room at home) to be boxed and we were running out of room for anymore boxes.

So I decided to take the leap to paperless that I had been reading and following for about one year. We started about March 2002 and as of this writing (Sept. 2003) we have put the last cog in place. Here's how I approached it and what I did.

I had a few parameters within which I wanted to work. First, I didn't want to spend a lot of money and second, I didn't want to change the basic structure of the office and how we handled cases and clients. So I started reading. I went back through my collection of Law Office Computing magazines for about two years to find whatever articles looked relevant. I read some of the guru's websites and books.

The Case Audit :

I started off by picking one EA case that I thought was somewhat typical and audited each piece of paper in the folder. I tried to bunch the paper into categories (deeds, tax returns, appraisals, research, etc.). Then I took a look at each category and each page within each category and determined if we could junk the paper and just keep a digital copy. If not, I tried to specify why I needed to have a hard copy to force myself to make policy decisions. The audit was one of the smarter things I did and the results proved useful again and agin as we progressed through this project.

The Issues to be Dealt With and the Priority List :

Next, I put together a list of the issues that would be involved in this switch. For example, would we keep nothing in paper mode or only some things? Procedurally, how would whatever we needed to convert to digital occur? Would we go back and digitize all of our old files, only files that were currently open, or only for files that were currently open from the cut over date forward (i.e. currently open files would be a mix of digital and paper)? We chose the latter option as the most cost effective for us. What equipment would we need to accomplish this? And many more. I involved my staff (of one) and we prioritized what we had to do/buy and what we already had that we could use.

Phase 1-Outgoing Documents :

Here's what we decided to do:

The paper broke down neatly into outgoing (documents that we created) and incoming (documents that we received from someone else). So we broke the project into these two phases. I wanted to have a success quickly so we decided to deal with outgoing documents first. It seemed like the easiest side to attack since we already had a digital copy to begin with and we were in total control of these documents from creation through filing. And my sample case audit convinced me that we could reduce the hard copy file size by about one half if we just dealt with the outgoing stuff.

So we made the decision that we would no longer make a photocopy of everything that went out of the office since we already had a copy on the hard drive. Our rule was (with a few exceptions) that we would only keep a copy if our client had signed it. That meant we would keep a copy of CYA letters that we typically had a client sign, estate/gift tax returns, etc.

As to Wills and Trusts, we had decided several years earlier that we would no longer keep signed copies of those. We had never kept the originals. As to the signed copy, our thinking had been that many clients were looking at us as a repository of a copy of these documents. So we were receiving too many calls from clients requesting that we provide escrow companies or banks with a copy of a document even years after we had closed the case. Besides, these documents took up a lot of room in the client folder and consequently in the bankers boxes in the laundry room. The thought was if we told the client we did not retain a signed copy but that the client had it, it would be better for client relations than to suggest that they pay us the true cost of our administrative time to fish it out, copy it, and mail it. So we were already only relying on the digital copy for the Wills and Trusts. (Lately, as a client service, we have begun to keep scanned signed copies of EP documents for our better clients.)

One issue which we needed to resolve was how we would be able to find documents on our hard drive. Not being able to physically thumb through hard copies was a scary thought. We had always kept filed digital documents in a Matter Folder but it seemed we needed more. We decided we would start using "long naming" for our file names. This simply meant that we would break our habit held over from old DOS days of limiting file names to 5 characters plus a 3 character extension. So instead of naming a Letter to the Court "LtCr1.wpd" (of which we might have had five) we now would name it "Lt Crt Re Distribution Snafu.wpd." Secondly, we knew that as we added incoming documents to the digital mix we would need some type of indexing system. But I decided to push ahead with the outgoing phase before I had the indexing system in place in fear that if I waited, I'd never get started.

This phase went pretty easily once we forced ourselves to break the habit of photocopying everything and over time we have only slightly adjusted what we keep or don't keep in hard copy.

Indexing System :

While we were implementing the first phase I was concentrating on how the second phase would work. I knew that if we doubled the number of documents kept in digital form (by adding incoming documents) the system of simply filing all documents in the Matter Folder even with long naming would eventually become overloaded-especially on larger and more complex EA cases. So I needed something better.

Fortunately, I already had the software I needed. My case management software, Timematters (TM), had a document management system (DMS) already built into it. All I had to do was implement it. All files that I saved to my hard drive through the DMS would be indexed under the matter. I could search the index by name or date and could even break the files down by type of file (word processing, spreadsheet, pdf, etc.) But I wanted to have it broken down by the same indexing system I had been using with my paper files (Correspondence, Client Data, Wills/Trusts, Asset Information, etc). So I posted an inquiry to the unofficial TM Email List. Within a few hours I had the ear of Roy Allen, a very experienced TM consultant. With some give and take on my ideas he guided me through the exact keystrokes to fine tune the indexing system. It worked on my tests, although I've modified it a few times since. That meant I was ready to tackle Phase 2.

Phase 2-Incoming Documents :

It was clear from my case audit that many incoming documents could be requested in digital form whether by email attachment or fax. Even though my client base is predominantly older, many of them have fax capability. And a growing number have email; a few even have scan capability. Certainly most CPA's have the capability as do most other professionals (and even appraisers are finally coming around), So it seemed that if we simply encouraged anyone with whom we were dealing and who we expected to send us something to do so digitally, we 'd be in good shape.

We already could receive faxes digitally. After a while we created the rule that any faxed document that we received we would "print" to pdf and save it in our DMS. My assistant would then notify me by TM Messaging (an Instant Messaging system) that I need to look at that particular fax. That has worked out quite well.

But that still left a significant portion of Incoming that was in hard copy mode. For that we needed a scanner and a rule. Procedurally, when would I scan and when would I hand it off to my assistant. The rule: Of course, any documents that are brought into the office she scans. We agreed that if a client was in my office and the number of pages was over 10, it would go to her.

I had hoped that we could use the HP 3100 at the start and get something better later. I was wrong. The HP 3100 scanned at about 3-4 ppm, wholly inadequate for any real business environment and a guarantee of failure of this Phase if I attempted to force its use. So I struggled for a while in determining what to buy. Of great help was the Better Buys for Business⁽¹⁾ guide on scanners. I decided on a Fujitsu 4120 (20ppm) scanner which I positioned at my assistant's desk. It came with a full copy of Adobe Acrobat 5 for less than $900 on the Internet. We now had the capability of scanning a larger number of hard copies without having to wait half a lifetime for the job to be completed. That meant that the brokerage statements that the client dropped off or the appraisals that came in, all in hard copy, could be scanned and tossed. (Ok, we did tend to keep the original appraisal to attach to the IRS Estate Tax Return.)

What about me :

That only left my desk as I had nothing with which to scan. Again, I didn't want to spend a lot. The Better Buys Scanner guide did not cover anything below 20ppm and, although they had guides for multifunction machines, the ppm ratings were rarely discussed. So I waited and deliberated, far longer than I should have. About a month ago my HP 4 broke. Fixing it was not cost effective given that it was about 11 years old. So I purchased a Brother 9700 (less than $430 at Office Depot). I was pleasantly surprised to find that it scans at about 8-9ppm. More than adequate for my 10 page limit rule. I've only had it a short time, but it seems to do the trick.

The Result :

Now when an EA case is ready to be archived, the paper is nominal and all of the digital files are moved to a CD Rom in case we ever need to retrieve a document. We set a date for its destruction 5 years out, a practice started several years ago. When EP cases are completed, the paper is also nominal. But EP cases are handled differently. We keep the EP documents on the hard drive until the client dies (I have separate folders for Active Matters and for Inactive Matters) so that they can be retrieved when the client calls with a question. The growth of bankers boxes in the laundry room has slowed to a crawl and should soon start stabilizing or reversing as the dates for destruction of completed EA cases begin coming up next year.

The urge to keep getting rid of paper :

I keep looking around for other things that I can convert. I think the rule is to identify piles of paper of one particular type that keep on accumulating. (If it's a one time thing, it probably isn't worth the effort in thinking through all of the issues.) For example, I no longer keep, or even create, duplicate checking account deposit slips. I figured out that my time and billing program and Quicken already keep that information. Because of this, I only keep my ATM receipts until the next bank statement is reconciled.

Research found on the Internet. I now 'print" that to a PDF file and save it in digital form. We log it into our DMS and now can find it much easier than in the old days.

I no longer keep copies of client billing statements. I now "print" to PDF format. I used to keep these statements for several years so just think of how much space in a Bankers Box one year's worth of statements takes up.

The biggest victory in the additional paper category has been getting rid of my accounts paid statements. Again, I used to keep these for several years and they absorb massive amounts of room. Now, I scan the statements and file them in my Bills folder which is broken down by Year, Month, and Day paid. If I ever have to refer to a bill it is much easier to find now. I never kept my personal accounts paid statements and still don't.

And now I've even started to search around the house for things that I can do better digitally. I used to have an enormous folder filled with all the owner's manuals of the various things I had purchased. It was overflowing. I tossed many manuals for those items had long been given away. As to the other items, I decided to go to the manufacturers websites and download their manuals to be saved to a folder on my hard drive. Most manufacturers (except it seems for Sears) provide this option. I still have some manuals for those products that I purchased before the digital age. But the paper folder is now a fraction of what it used to be. And I can find the manuals on my hard drive much faster than combing through that overflowing paper folder.

The rule: With few exceptions, I do not keep owner's manuals. They are tossed as soon as I have decided that I am keeping the item

Remaining Problems :

I wish the Fujitsu was an automatic duplexer and will probably purchase one when the prices drop. (Note: 6/10/2004. I have now discovered that the Fujitsu does automatically duplex.)

We still need a networked computer in the library where I occasionally meet with clients. After all, with almost everything digital, if the client asks a question which requires reference to a document, running back to my office is inconvenient. It will probably be a laptop so I can load the client files on it when I occasionally visit a bed bound client at home or go to court. But it doesn't seem to be a big deal.

By no means is my system perfect. We still lose an occasionally misfiled document (or maybe it was zapped by accident). But that occasionally happened with the old paper system, too. And it's much easier to run a digital search of my hard drive than searching every piece of paper in the office or matter folder. After all, the issue is not whether the system is perfect but whether the new system is better than the old. In my opinion, there is just no comparison.

Unanswered Issues :

There are still things I need to figure out. For example, when I go to court with that laptop and the judge asks to see a document, how do I do that. Here in San Diego County, as far as I know, we don't have printers in the Probate Court to which I can connect. So do I bring a portable printer with me?

Security :

If you are going to rely on digital records you absolutely must backup. And you must have good anti-virus software and firewall protection. This is another subject for another day. But then you should be doing all of this anyway.

Sidebar stuff

What I already had-hardware :

We already had an analog copier (28ppm), an HP Laser Jet 4050 (18ppm) which was the office workhorse printer and a backup HP Laser Jet 4 (8ppm). We also had an older HP 3100 multifunction that was used almost exclusively as a fax machine and occasionally as a backup copier. My assistant had her computer workstation (PC Pentium III, 500mhz, 10 gb) and I had mine (PC Pentium III, 933mhz, 40 gb).

What I already had-software :

Software to Start With: Both my assistant and I had Corel's WP9 suite in which we really only used the wordprocessor and TimeMatters Case Management. We also had one full copy of Adobe Acrobat 5 that I had purchased to download my entire website periodically to please the State Bar Rule Makers and their requirement that we keep advertising material for a certain period of time. WinFax, Timeslips, Quicken, and the normal other software that one might find in an Estate and Trusts practice.

What I already had-other :

We also had a very good paper filing system both within folders and for keeping track of folders.

Resources :

Timematters Email List (Email join-timematters@lists.elder-law.com to join).

Better Buys for Business (www.betterbuys.com): This is sort of the Consumer Reports for business. It tests and reports on the various products and, most importantly, gives its Editors Choice to those that it thinks are deserving.

Ross Kodner's website at www.microlaw.com had some excellent and free presentations. Later in the process I read "Virtual-Office Tools for a High-Margin Practice" by Drucker and Bruckenstein. Although this latter book is targeted for financial planners, I believe an Estate Planning Practice is much more akin to a Financial Planner's than a Litigation Attorney's.

Disclaimer: