Document Demolition Experts Clean Up

ST. LOUIS - Jordan, Lawrence & Associates is trying to change the banking industry's pack-rat ways.

Banks generally box up the reams of records generated by day-to-day business and shove them on a shelf in a crowded warehouse.

"Banks save everything," said Brad Jordan.

"Ten copies of everything," corrected his partner, Alice Lawrence.

The two own Jordan, Lawrence, the nation's only consulting firm dedicated to figuring out when banks may discard records without running afoul of government regulators.

Records compliance sounds like a cinch, but Jordan, Lawrence is proving it's not.

"Our clients, on average, throw away 55% of their records on the first pass," Mr. Jordan said in an interview. "That means, they throw away over half their records immediately."

Jordan, Lawrence has dumped documents for the best of them: Banc One Corp., Boatmen's Bancshares, Wachovia Corp., First Chicago Corp., First Union Corp., and Northern Trust Corp.

"Most records don't have anything longer than a three- to five-year requirement, but we have banks keeping records forever - literally," Mr. Jordan said.

Customers credit Jordan, Lawrence with delivering quick results that can be measured in clear reductions to noninterest operating costs.

Wachovia's banks in North Carolina, South Carolina, and Georgia pitched 80,000 boxes after hiring Jordan, Lawrence. About 18,000 of those boxes belonged to Wachovia's Columbia, S.C., bank, where general services officer Bob Schooler pegged annual storage savings at nearly $40,000.

In fact, Jordan, Lawrence guarantees it will reduce record volume, which pares storage costs and curtails the time it takes to find documents. The firm also sets destruction standards that can help a bank fend off legal challenges.

"Records that are available are subpoenable, even if you didn't have to have them,' Mr. Jordan noted. "So if you have them and they are requested, you are obligated to go get them."

Banc One has hired Jordan, Lawrence to purge paper at all of its 65 banks. The company just finished a pilot project at Banc One subsidiaries in Wisconsin, Indiana, and Kentucky.

Craig Tews, manager of warehouse operations at Bank One, Milwaukee, said he ditched 61% of its 32,000 boxes after hiring Jordan, Lawrence.

"I was able to open up my warehouse for the next four or five years," Mr. Tews said. "The system is wonderful; it's so easy."

Once hired, Jordan, Lawrence inventories a bank's records, sorting them by department and record type. Then, using in-house software, the firm figures out how long each file must be kept either for the bank's operational needs or to comply with regulations.

"Our software sweeps through the inventory base and calculates all the destruction dates automatically, based on the approved retention schedule," Mr. Jordan explained.

The software also generates periodic reports noting which records are ready to be destroyed.

Projects range from 90 days to six months. The fee, which is fixed before work begins, ranges from $75,000 to $1 million.

"These are pretty good payback projects," Mr. Jordan said, estimating that most banks recoup costs in six months to two years.

While Jordan, Lawrence has focused on records compliance since its founding in 1987, the company is adding two new, related services.

First, Jordan, Lawrence plans to help banks save money by eliminating unnecessary printing.

A bank that hired the company for records compliance also asked Jordan, Lawrence to investigate how its 15,000 computer printouts were being used.

The consultants found that many bankers wrongly assumed printouts must be retained for compliance reasons.

"People are demanding it on paper because they think they have a regulatory need to keep it," he said. "But examiners, auditors, and regulators do not look at computer printouts."

Regulators, he said, want to see original documents.

"That's where the fraud is; that's where the errors in regulatory compliance are," he said.

Following Jordan, Lawrence's recommendations, the bank is trimming $22,000 from its recurring annual expenses by eliminating most of its printouts.

"The savings are just huge; it surprised us all," Mr. Jordan said. "The savings will allow them to give everybody everything on-line, which is quicker, better, cleaner, and less costly."

The second product focuses on reducing the number of bank documents that are filmed.

"Banks film way too much," Mr. Jordan said. "They always justify filming by saying it takes up 2% of the space paper does."

But filming can be 100 times as expensive as storing a document for five years.

The first bank to undergo Jordan, Lawrence's micrographics analysis is shutting down 100 filming departments.

"We couldn't find anything important enough to keep filming," Mr. Jordan said.

The decision to quit filming will save significant labor costs.

"They have whole departments for this. Four or five people who have been there 40 years and are making a lot of money just shoving documents through a camera," Mr. Jordan said.

Jordan, Lawrence is hoping to cross-sell its services and is betting the acquisitions spurred by interstate banking will bring in more business.

"A big part of our work right now is banks that are going through mergers," he said. "What happens is they suddenly inherit two or three disasters."

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