Why is proper legal document storage and naming important?
When asked which business processes are most critical to their enterprises, entrepreneurs are quick to mention finance, IT, and human resource management, but legal document management rarely makes the list of priorities.
With only a handful contracts and legal documents in the early stages of your business, it’s easy to overlook the necessity of good storage practices. But building a solid foundation and keeping a keen eye on your contracts and legal documents is not only a legal requirement, but will save you a lot of money, time and trouble. A few examples:
Deadlines: Just like your personal subscriptions, more and more business agreements contain an automatic renewal provision and other important deadlines (e.g., if you do not terminate, the contract renews for another year). Having an overview of important deadlines will save you a lot of money.
Due diligence and audits: Investors, regulators, tax authorities, banks, customers and others may request to see your legal documentation. By staying organized, you will save a lot of time (and potentially trouble).
Intellectual property: Trademarks need to be renewed on a regular basis – if you forget about this, your trademark protection may be lost to a competitor.
How to set up basic legal document processes and storage?
Legal document management means having simple structures and contract processes in place.
- Accessible repository: Store the legal documents in a company-accessible repository (this sounds simple, but more often than not, contracts are stored in inconsistent locations, e.g. decentralized and stored on employees’ laptops, not in a central company repository).
- Consistent contract naming and storage: Introduce one naming logic that you and your employees apply every time a new contract is saved.
- Tracking and reminders: Implement a tracking and alert system that informs relevant parties about key data (e.g. deadlines, expiry, renewal, or other).
Document naming & storage best practices
There are many possible logics for document naming and storage – and none is perfect. The key principles can be summarized as follows:
- Make sure you stick to one naming and storage convention across your whole company.
- Ensure everyone names documents and stores them consistently.
- Create a guide for employees (especially new employees) in which you describe how you name the documents, why, and in what categories you store them.
- Define, monitor, and regularly check who has access to the various documents. The need-to-know principle guides the decision: Only give access to those that have a need to know the information to fulfill their tasks.