Document retention in the wake of Andersen

In the wake of Arthur Andersen's demise after its involvement in the Enron case, and the subsequent U.S. Supreme Court ruling, we've all learned something about retaining (or not retaining) business documents. 

There are certainly some instances when it's appropriate to withhold or dispose of business documents. The Supreme Court in Arthur Andersen LLP vs. United States(1) pointed out that it's not necessarily wrong for an attorney to persuade a client to withhold privileged documents even with the intent to prevent government access to those documents. Nor is it always wrong for a corporate manager to instruct employees to shred documents under a valid document retention policy. However, it's equally true that there are limits to a company's ability to dispose of documents, particularly when litigation or a government investigation is pending.

For three years, much of the world has viewed Arthur Andersen as having obstructed justice by shredding Enron documents. Yet, in May 2005, the U.S. Supreme Court overturned the guilty verdict of the District Court that led to the collapse of the accounting and auditing giant. This is not to say the former 89-year-old firm was vindicated for its actions. Rather, the Court reversed Andersen's guilt because improper jury instructions were used in Andersen's trial.