SharePoint document libraries provide a unique opportunity to really improve the way you store documents.  Often the layout and organisation of document libraries is not given the thought it requires, with documents being grouped by team and copied over from the old 'shared drive structure' into various document libraries scattered throughout the SharePoint implementation.  Whilst this approach may allow you to get on with working, it misses out on the opportunity to reorganise your approach to document storage.

Custom Fields to Replace File Structure

Using custom fields in your document libraries provide you with a great way of producing 'virtual' folder structures, which can drastically simplify how documents are stored.

This is particularly the case where your enterprise is attempting to standardise a filing structure.  You may decide that for each project your team runs, you should have a standard set of folders, and all documents are stored in those folders in a standard way.  Of course this is good practice, and makes it easier for people to know where they should store their work, and more importantly, from where they should retrieve work.  for example, your team may have a set of folders for each project including: Planning, Presentations, Research Data, Draft Reports and Published Reports.  In reality, this set of folders would probably be much longer, and contain a number of sub folders.  If you are running 10 different projects, you would need to replicate the entire folder structure for each project, regardless of whether those folders were going to be relevant in each case.

This presents us with two issues; the first is relatively minor - in that you will likely have a number of project folders containing empty child folders.  Whilst it is not a big issue in itself, it does clutter up the system and can make locating a specific document that little bit more confusing.

The second is that you have just increased the length of the path to find arrive at a document.  Why I hear you ask?  Because your users are in a trade off that they dont normally realise.  The link to any document in SharePoint is infact a web address.  Although it is unlikely you will ever bump up against the technical limit of a web address (see http://www.boutell.com/newfaq/misc/urllength.html), there is a practical which essentially realates to 'the shorter the better'.  Really really long URLs simply become difficult to use.  Subconciously, your users know this to be the case, and are constantly reminded of it every time a collegue emails them a document link.  Your less tech-savy users are actually put off by what they see as a long line of jibberish, so reigning it in where you can is generally a good option all around. Turning this:

http://mysharepointsite/mygroup/myteam/TeamDocs/My_Long_Project_Name/Planning/My_Long_Document_Name.doc

into this:

http://mysharepointsite/mygroup/myteam/TeamDocs/Planning/My_Long_Document_Name.doc

simply makes it a little more friendly. 

Take note though; using a custom field to help define your document does not remove the requirement for unique document names.  Consequently, you do need to consider how documents are named if you are going to undertake this approach.

Custom Views to Help Navigation

Having now organised your document library so that you only have 1 instance of your standard folder structure, how do you make it more useable?  The answer is easy - use a custom view.  Create a custom view that shows all document where the given custom field matches a specific value.  Using the example above, a filter showing all files and folders that are flagged with 'Project X' means that the entire document library is much simpler to use.  Your users who only work on specific projects can even link directly to the filtered document library, making it easier still.  Creating a custom view is very simple to do and at the click of a mouse the user can change from one custom view to another, showing only the set of documents and folders that they really want.