I read this article on Above the Law about some current problems with the Dewey & LeBoeuf dissolution, and couldn't help but think there are lessons to be learned by us folks down on the staff level about how to handle a few important things, such as document retention and 401(k) accounts.
It appears that D&L has hundreds of thousands of boxes of documents at various storage facilities all over the place. I'm a solid believer in scanning old documents for electronic storage, and destroying them except for ones with original signatures. Granted, with a firm the size of D&L, that would be a monumental task, but for small or medium sized firms it is one well worth pursuing. Electronic storage is far cheaper than physical storage. Plus, electronic storage can be easily backed up for safety. If a fire takes out your physical storage facility you're pretty much screwed. Not to mention what happens to documents when a firm dissolves or splits apart. Who gets what? Who pays for what?
My current firm has a policy of not keeping paper files except for critical documents and those with original signatures. Everything else gets scanned into a database and shredded immediately. This is by far the best system I've encountered in my ump-teen years doing this job.
My previous firm required us to maintain paper copies of EVERY-FREAKING-THING, as well as scanning it all onto a database, apparently because the executive committee was populated with Luddites. It was a laborious and time-consuming process to maintain paper files of everything, especially in the larger, more complex litigation matters. I wasted many un-billable hours maintaining massive, unwieldly redwelds bulging with crap noone would ever look at again. Ugh. I was quite happy to leave that system behind.
Now for the 401(k) account issues. Apparently, D&L employees just found out that their 401(k) accounts were assessed with an additional 1% fee for administering the accounts due to the dissolution. That doesn't sound like a lot, but when you only find out after the fact that the fee was charged it can be pretty irritating. My recollection is that 401(k) accounts are supposedly independent from control by the employer, and the administration fees are usually paid out of the investment earnings, not the balance on hand. Ultimately it will be up to the ERISA and Bankruptcy lawyers to sort that part out. Hopefully the remaining 401(k) funds will not be tapped for any reason.
When it comes to my own 401(k) practices, I have a somewhat complicated strategy. My grandfather did a lot of investing after he sold his business in the 70's, and passed along many valuable lessons to the family. Chief among them was that "don't put all your eggs in one basket" is Rule #1 in finance, including retirement accounts. Most Americans can expect to work for several different employers during a career. Whenever I switch employers, I don't move the old 401(k) into that run by the new employer. Instead, it gets converted into an IRA. Each of these I keep with a different financial institution (I have 2 IRA's from old employers and one current 401(k).) Every year I split about a quarter of my annual bonus into the IRA's, and another quarter into my 401(k), except for a couple of years when I needed the money pretty badly. Short version, if any one of them tanks or makes bad investments, then I'm still protected to some extent.
Granted, all of this is just my own personal experience and preference. Insert disclaimer here that I'm not giving advice, merely passing along my own experiences.
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