Almost any piece of paper that goes through your business may be a target for discovery in a legal suit — and it’s getting harder to figure out which seemingly routine papers you can safely toss.

Most companies now have some system for archiving electronic documents, including email, at least to some extent. But paper documents are often dumped into file folders or boxes that rarely see the light of day again — most companies have shelves, even rooms, groaning with such records.

We talked to Karen Cummings, executive vice president for Sales & Marketing at document software provider Omtool about the ways in which companies leave themselves open by a casual attitude to document management. Omtool sells products like AccuRoute and ObjectArchive that are aimed helping solve such problems.

Q: What is the main legal aspect of document management that most companies miss?

A: If your company gets into a lawsuit, there’s a good chance that there will be some kind of discovery process, where you will be asked to produce all relevant documents relating to the issues in question. In recent years, courts have allowed plaintiffs to make major demands on companies with so-called “fishing expeditions.” And it’s not just Fortune 100 companies that have this problem.

It’s really important that corporate documents be readily and speedily retrievable. That’s a good reason why all your paper documents should be in electronic form and in searchable format, whether searchable PDF, text, or Word. The way to do this is by setting up procedures for identifying important documents and converting them into searchable electronic format, using scanners or multifunctionals with a software product like those Omtool offers, which will help you convert, direct, and save the documents. Depending on the size of your firm and the paper you generate, you may then want to add a high-end document management system, such as Documentum or SharePoint.

Q: How do I prove that I haven’t altered or hidden key documents?

A: There should be documented set of procedures, and proof that it is regularly used in an orderly and predictable manner. You need to show that the untampered-with “original instance” of each document is what’s available.

The next step involves keeping records of who handles and has access to documents, including paper documents. That means controlling workflow. Users should be logged in when they use a copier, multifunctional, or scanner, just like they are logged into a PC More and more copier-multifunctionals let you ask users to log in with a password or authenticate using an access card. Combined with the right software, this can let you know who is accessing which documents, who is archiving them, and who is copying, printing, or emailing them.

Faxing is a special issue. Companies are more and more turning away from using standard standalone faxes, which are hard to control access to and log activity from. Scan-to-email, properly logged in, is one solution. Network fax, where incoming faxes are routed to email and where documents like Word files are send via fax lines from the desktop is another trackable solution.

Q: Is it worth the trouble and money to put these steps in place?

A: Discovery can be a major time and money sink, even if the discovery turns up nothing to help the plaintiff. Assigning personnel from your company means that they stop doing whatever else they are doing — and searching through (confidential) files is not something you want to entrust to casual employees, who might not even know what they are looking for. Having junior attorneys or paralegals from your law firm do the discovery is certain to be even more expensive.

Furthermore, the possibility of major fines for having missing and inaccessible documents can be substantial. That can put the company in jeopardy of fines or lost lawsuits. For most companies, the payoff in setting up clear digital conversion and archiving systems is worth the effort, simply to reduce risk and costly catch-up.

Tags: discovery, Karen Cummings, Omtool, workflow