Tracy,

Leigh did a great job outlining the approach to this issue. I ran across
this frequently in a former life working for a consulting and outsourcing
company. Clients would want their retention schedule brought in to the
client contract and applied to the records we were maintaining on their
behalf. Problem was, managing hundreds of different retention schedules was
simply not feasible. In addition, we had clients wanting to impose their
retention schedules on our business records (time-keeping and financial
records was a typical ask).

As Leigh noted, it is critical that you define what records belong to your
firm and what records belong to the client. Next, you meed to determine how
long your firm will retain the client's records before returning them to
the client. This is critical. We had situations where a client asked the
firm to perform some due diligence relating to a potential M&A transaction,
then, when the deal fell through, demanded that we destroy every scrap of
information relating to that deal. Well, that's a nice idea, but when you
are billing time and materials as a public company, you kinda need to
retain some records to show what you did to bill out the work. (The funny
part was that the client would demand that we destroy everything -- billing
records, sensitive information, work product, etc. -- then their auditors
would try to work us over for not maintaining records relating to what they
were billed for.)

I can't emphasize enough how important it is to define what records belong
to your firm and what records belong to the client and how long those
records will be maintained. There's likely a third category -- records that
belong to both parties. This is where things will likely be the stickiest.
A client may tell you that you can only keep a certain work product for X
years, but there may be other reasons to maintain that same documentation
longer -- perhaps a standard of practice or a need to retain the work
product to meet a regulatory or other third party documentary need.

The net of this is to ensure that these practices are well-defined and part
of the client engagement documentation. You also need to work closely with
the people writing contracts with clients to ensure that they aren't
agreeing to the impossible.


Patrick Cunningham CISM, FAI

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