Five Document Management Steps to Protect an Emerging Company’s Future

August.11.2022

Focused on getting their businesses in a position to thrive, few emerging companies think about how documents and document management policies can cause significant future litigation exposure. We have found that emails, IMs, texts and other documents from a company’s early days often pose a threat to the company’s future because employees are less formal and unfiltered early in a company’s life cycle. In trial, we have seen, time and again, opposing counsel using communications and documents from a company’s inception to support whatever false narrative the plaintiff is trying to tell.

Outlined below are five easy steps that emerging companies should take to minimize liability and litigation risk.

  1. Handling Informal Channels of Communication.
  2. Train employees to write appropriate business communications
  3. Implement a document retention policy.
  4. Include counsel as part of the communications team.
  5. Create policies that protect trade secrets and other confidential information.


1. Handling Informal Channels of Communication.

Text messaging is more frequently being used to communicate and may offer benefits in developing professional relationships—but its use also creates serious risks. Train employees to treat conversations through texting and instant messaging apps as they would other formal channels of communication: stay professional and don’t say anything you wouldn’t want broadcasted.

2. Train employees to write appropriate business communications.

The worst company documents generally don’t come from employees with nefarious motives, nor do they reflect what someone was really thinking at the time. Instead, some of the most damning trial exhibits are documents and communications written because someone is in a rush, because they are careless or because they did not understand that everything they write will be considered a formal business document. Some of the worst exhibits in litigation are emails from people who were venting or trying to be funny (executives and managers are among the worst offenders).

The key is to provide early and regular trainings that teach and remind employees the importance of being careful and accurate in all communications, and emphasize that communications can be used years later, without any context, against the employee and the company. Effective training explains best practices for document creation and educates employees using real-world examples.

3. Implement a document retention policy.

Document retention policies define how and which documents are kept as well as the systematic process for document destruction. Emerging companies should work with legal counsel as early as possible to define (1) the documents needed, (2) the documents the law requires them to keep, (3) how long they should or must keep those documents and (4) appropriate processes to suspend a document retention policy when faced with litigation. A document retention policy should also describe how databases and electronic records will be retained and for how long. Once established, employees should receive regular training on the policy.

4. Include counsel as part of the communications team.

Good lawyers won’t stifle public statements that are good for your business. They will protect against publishing misleading or false statements that can increase litigation exposure. Judges and juries always assume public statements were fully vetted, so have all statements fully vetted by counsel to avoid damaging the company’s credibility.

5. Create policies that protect trade secrets and other confidential information.

Trade secrets are the lifeblood of many emerging companies, and protecting this confidential information is imperative. Not taking reasonable steps to keep the information secret can result in losing the legal right to stop a bad actor from using the information. Some considerations to protect your trade secrets include:

  • Label confidential documents (electronic and paper) “confidential.”
  • All employees should agree in writing that they will not disclose confidential information and that they will keep the information confidential.
  • Grant access to information on a need-to-know basis; if third parties (funders, joint venturers, etc.) need access, they must sign an NDA.
  • Keep confidential information in a safe place (computer or external drive with a password, password-protected electronic documents, locked file cabinet or room, etc.).
  • Enforce all confidentiality policies and immediately seek the return of any improperly disclosed information.

Please let us know if you would like to discuss how to implement any of these suggestions.