GARP® Series

GARP® and Its Weight on the Legal Profession

The Generally Accepted Recordkeeping Principles®, or GARP®, is a set of eight principles published by ARMA International to “foster general awareness of recordkeeping standards and … to assist organizations in developing record systems that comply with them.” (See www.arma.org/garp/ for more information.) The principles set forth how an organization can ensure accountability, integrity, protection, compliance, availability, retention, disposition, and transparency in its recordkeeping and information governance program.

John Isaza, Esq., FAI

GARP®’s impact on the legal profession, including its guidelines for judges deciding spoliation in felony and serious misdemeanor convictions, is noteworthy. The GARP® Principles tie in closely with the American Bar Association’s (ABA) Model Rules of Professional Conduct (Model Rules), as well as the Federal Sentencing Guidelines Manual (Sentencing Guidelines). This article demonstrates how compliance with GARP® may help ensure compliance with rules guiding some professions, specifically like those imposed on lawyers and judges.

GARP’s® Relationship to the Model Rules

Pursuant to the ABA’s goal of achieving the highest standards of professional competence and ethical conduct among attorneys, the ABA adopted the Model Rules, which “serve as models of the regulatory law governing the legal profession.” (Read more at www.americanbar.org.) Every state has codified its own version of the Model Rules in one form or another. As noted below, lawyers who follow the GARP® Principles will assure themselves and their clients of compliance with several sections of the Model Rules.

Client Requests for Information

Model Rule 1.4 (a)(4) requires a lawyer to promptly comply with reasonable requests for information. The availability of information upon “reasonable requests” is thus a key component of compliance with Rule 1.4. The GARP® Principle of Availability requires an organization to maintain records in a manner that ensures timely, efficient, and accurate retrieval of needed information. A recordkeeping program that is readily available and understandable thus ensures compliance with Model Rule 1.4(a)(4).

Similarly, the GARP® Principle of Transparency requires that the processes and activities of an organization’s recordkeeping program be documented in an understandable manner and that they be available to all personnel and appropriate interested parties. The Principle of Transparency also echoes the availability mandate of Model Rule 1.4.

Attorney-Client Privileged Communications

Model Rule 1.6 governs the client-lawyer relationship and the confidentiality of information. According to this “[a] lawyer shall not reveal information relating to the representation of a client.” The Principle of Protection calls for a recordkeeping program constructed to ensure protection to records and information that are private, confidential, privileged, secret, or essential to business continuity.

Such a recordkeeping program ensures compliance with Rule 1.6’s mandate that “information relating to the representation of a client” be held in the highest confidence. A recordkeeping program that complies with the Principle of Protection (by protecting the appropriate client information) enables a lawyer to comply with the Model Rule requirement of confidentiality, at least as to privileged written client communications or even voicemails and other recorded data.

Client Records

Model Rule 1.15 regulates the lawyer’s conduct when safekeeping property of the client. Subsection (a) specifies that when a lawyer holds property for a client in a separate fund, “complete records of such account funds and other property shall be kept by the lawyer and shall be preserved for a period of [five years] after termination of the representation.” The Principles of Compliance and Retention, both of which require that a recordkeeping program be constructed to comply with applicable laws and other binding authorities, are intended to capture compliance with requirements, such as the five-year retention requirement specified in Model Rule 1.15.

Attorney Supervision Responsibilities

Model Rule 5.1 details the responsibilities of partners, managers, and supervisory lawyers. It states that “[a] partner in a law firm, and a lawyer who individually or together with other lawyers possesses comparable managerial authority in a law firm, shall make reasonable efforts to ensure that the firm has in effect measures giving reasonable assurance that  all lawyers in the firm conform to the Rules of Professional Conduct.”

This rule even applies to lawyers who are in a supervisory role or who order or ratify the conduct of another lawyer as noted in Model Rules 5.1b and 5.1c(1) and (2). The key component of these Model Rules is oversight and responsibility for compliance with rules, such as Model Rule 1.15, which calls for records of clients to be preserved for a period of five years after termination of the representation or Model Rule 1.6 to protect the attorneyclient privilege.

This edict ties in closely with the GARP® Principle of Accountability, which requires an organization to assign a senior executive “who will oversee a recordkeeping program and delegate program responsibility to appropriate individuals, adopt policies and procedures to guide personnel, and ensure program auditability.”

The Model Rules do not allow a lawyer to escape responsibility for the improper destruction of a client record or the disclosure of privileged communications simply by placing the blame on a more junior lawyer. Law firms must put in place an appropriate program designed to ensure there will be no confusion regarding accountability for recordkeeping practices. This should result in compliance with the Model Rule 5.1(a) requirement that the “firm has in effect measures giving reasonable assurance that all lawyers in the firm conform to the Rules of Professional Conduct.”

GARP® and the Sentencing Guidelines

The Sentencing Guidelines is a 574-page document that guides judges on what punishment should fit a crime. The mandates provided by the Sentencing Guidelines often apply to individuals and organizations. They assign different levels to crimes, wherein the higher the level, the harsher the punishment. For the attorney’s own corporate officers or the so-called C-level of any client organizations, compliance with GARP® to avoid harsh sentencing under the Sentencing Guidelines should be a high priority.

The Sentencing Guidelines were issued pursuant to Section 994(a) of Title 28 of the United States Code to “establish sentencing policies and practices for the federal criminal justice system that will assure the ends of justice” by providing appropriate sentences for those convicted of federal crimes (see www.ussc.gov/guidelines/2010_guidelines/ManualHTML/1am. htm). Failure to keep complete or accurate records is considered in determining sentences. Recordkeeping is thus an important part of the Sentencing Guidelines.

The Sentencing Guidelines focus on criminal behavior, such as obstruction of justice, which could include spoliation (the unlawful destruction or alteration of evidence). They also address falsification of records and general recordkeeping practices for the courts to consider in possibly increasing the terms of a sentence. Some of these will be discussed in the remainder of this article.

Regulatory Offenses

The Sentencing Guidelines identify “Regulatory Offenses” as a “Major Issue” in Chapter 1 (Introduction to the Guidelines), Part A, Subsection 4. This section essentially guides judges’ punishment for failure to comply with regulatory requirements. The Regulatory Offenses section of the Sentencing Guidelines specifically discusses recordkeeping practices.

To address technical or administrative-related criminal violations, “such as failure to keep accurate records or to provide requested information,” [emphasis added] the Sentencing Guidelines divide such violations into four categories and prescribe offense levels accordingly based on the 2010 Sentencing Guidelines. These recordkeeping, accuracy, and availability of requested information considerations tie in with the GARP® Principles of Retention, Integrity, and Availability. And, of course, when it comes to meeting regulatory requirements, the Principle of Compliance overarches all related considerations.

Obstruction of Justice and Recordkeeping

Part J of the Sentencing Guidelines (Offenses Involving the Administration of Justice) addresses sentencing that would be appropriate for obstruction of justice (see www.ussc.gov/guidelines/2010_guidelines/Manual_HTML/2j1_2.htm). Spoliation of documents could be considered in “obstruction of justice” claims.

Subsection 3 of Part J addresses recordkeeping specifically. It states that: “if the offense (A) involved the destruction, alteration, or fabrication of a substantial number of records, documents, or tangible objects; (B) involved the selection of any essential or especially probative record, document, or tangible object, to destroy or alter; or (C) was otherwise extensive in scope, planning, or preparation,” the sentence should be increased by two levels.

Compliance with the GARP® Principles of Integrity, Retention, and Disposition may prevent the wrongdoer from having a harsher sentence imposed by a judge. These principles are designed to ensure that records are preserved intact and that appropriate retention and disposition rules are followed in managing the lifecycle, not only of the official record, but of all data traversing the organization’s information management ecosystem.

To that end, the Principles of Protection, Retention, and Disposition are of critical import, as well. For instance, under all three of these GARP® Principles, the organization should have a solid set of policies and procedures along with implementing technology or capabilities to manage legal holds. Failure to implement a legal hold is one of the most frequently cited reasons for a finding of spoliation.

An organization that minds legal holds under the Principles of Protection, Retention, and Disposition may be able to avert possible spoliation sanctions – at least as to inadvertent spoliation or destruction.

ERISA Falsification of Records

Section 2E5.3. of the Sentencing Guidelines addresses labor racketeering, according to the 2010 Sentencing Guidelines. It covers “the falsification of documents or records relating to a benefit plan covered by ERISA” (the Employee Retirement Income Security Act). It also covers “failure to maintain proper documents required” [emphasis added] by the Labor Management Reporting and Disclosure Act (LMRDA) or the “falsification” of such documents.

The Sentencing Guidelines set forth in Section 2E5.3 may seem specific to only a few circumstances. In reality, most organizations have to grapple with labor management reporting and ERISA claims. Thus, at minimum, the GARP® Principles of Accountability and Integrity relate to Section 2E5.3.

The Principle of Accountability outlines the need for a senior executive to oversee the recordkeeping program of an organization. Compliance with this principle is necessary for any organization that offers plans covered by ERISA or may be bound by the LMRDA. The organization can avoid potentially harsher penalties associated with Section 2.E5.3 by assigning the appropriate duties to a senior executive to oversee compliance.

Similarly, the Principle of Integrity, intended to ensure authenticity and reliability, would help ensure records are the “proper” documents under Section 2E5.3.

GARP® Protects Organizations – and Their Lawyers

One thing is certain: The GARP® Principles are important not only for ensuring proper recordkeeping practices, but also for adhering to other laws and standards. By following the GARP® Principles, lawyers could help themselves and their clients mitigate, or even escape, liability and/or harsh sentencing resulting from poor recordkeeping practices.

Download the complete PDF version here.

John Isaza, Esq., FAI, can be contacted at jisaza@hilawgroup.com.

From January - February 2012