Bankruptcy, Biglaw, Document Review, Howrey LLP, Technology

Howrey’s Old Client Files Are Neither Gone Nor Forgotten

Howrey dissolved almost an entire year ago, but its bones are still filling warehouses and servers across the world, and costing hundreds of thousands of dollars in storage fees.

The firm’s estate is embroiled in the painstaking process of destroying old files or returning them to former clients. There is still a long, long way to go. In today’s Washington Post, we get to see a vivid illustration of the problems involved in putting to rest a massive law firm that bridged the paper and electronic eras.

It is also a good cautionary tale for other firms: these documents will not just go away, even if your firm bites the dust…

From the well-written WaPo piece:

“Howrey had a client list in the tens of thousands,”[Houston lawyer and Howrey trustee Allan] Diamond said. “They want their files back. Figuring that out is not easy. This is a monumental task of the estate. It will probably take six to eight months.”

Diamond declined to name clients, but in the past Howrey lawyers have represented Exxon Mobil, Caterpillar, Bristol-Myers Squibb, Monsanto, General Motors, Procter & Gamble and Intel.

Winding down a law firm’s data cache is especially complicated because virtually everything in it is owned by clients who have to be tracked down and contacted, whereas in bankruptcies involving other types of businesses, most of the data stored over the company’s life span is owned by the company itself. And because information retained by law firms is protected under attorney-client privilege, the estate must be particularly careful about returning or destroying the files so no one other than the client can access them.

This sounds like a real nightmare. The article says the firm has 55 years worth of documents in 220,000 boxes in Washington, Chicago, Los Angeles and Houston, as well as two electronic data centers in Ashburn and Amsterdam. Holy cow. That’s some Raiders of the Lost Ark-calibur storage.

It makes you wonder what the firm could’ve done (other than go on Hoarders) before it dissolved to have a better handle on this stuff. The words “retention policies” and “preservation policies” come to mind.

Because on top of being a royal pain in the behind, some unlucky saps are paying lots of cheddar for this:

The reviewing, indexing and sending of the files comes at a cost. Each box of documents must be thoroughly checked to make sure it doesn’t contain information from multiple clients, lest one company receive the proprietary information of an industry competitor. As part of the plan, Diamond is seeking court approval for former clients to reimburse the Howrey estate to defray the costs.

And that’s just paper files. The electronic situation is just as cringe-worthy:

On the digital side, the estate has begun contracting with technology services firm Aldridge Co. to transfer the data stored on large servers to smaller platforms in order to cut down on data storage fees. The Ashburn and Amsterdam facilities cost the estate a combined $100,000 a month to maintain.

As our tipster pointed out, this means Howrey was paying more than $1 million each year for storage of old dead files. I agree with the tipster’s conclusion: “Every law firm should be reviewing its document retention after reading that article.”

They say the dead are gone but not forgotten. Would that were true for Howrey.

The law firm may have dissolved, but the records remain [Washington Post]

(hidden for your protection)

comments sponsored by

Show all comments