Paper filing means that you avoid having one large pile of paper (where you can't find anything) and instead having lots of little piles of paper (where you can't find anything).
Seriously, there are two techniques involved here, both problematic:
Firstly, subdivision. This means having a separate folder, drawer, file, whatever for different topics, subjects, whatever. A simple - or seemingly simple - example should illustrate the issue:
George teaches Spanish, French, and a little Citizenship in a UK Secondary School, at all levels. Now, he could have a three folders, one for Spanish, another for French, and another for Citizenship; or he could have seven folders, one for Y7 papers, one for Y8 and so on; or he could have 21 files, one for Y7 French, one for Y7 Spanish, and so on. And then, of course, he will have stuff (this is a term which describes letters, memos, notices, flyers, exam papers, and any other piece of paper) which don't relate to specific Year-Subject combinations, but refer, for example to French, or KS4, or 'Modern Foreign Languages' or 'Gifted and Talented'. Not only does George need to make decisions, here he needs to remember his decision for every piece of paper
Second: sequence. This means putting things in order (for example, Y7 tests before Y8 tests). Howeve, even alphabetical order is notoriously prone to error.
If you can confidently put these names in alphabetical order, you have little to worry about:
MacArthur, J
McArthur, J
Macarthurus, T
Mac Arthur, JS
MCA R Thur, Solicitor
Mc Arthur, JP
MacArthurAnderson & Co
Mc Arthur, Prestley & Jones
MC Arthur
Otherwise, you may wish to gape at a typical set of rules NINETEEN PAGES LONG - just on the seemingly simple process of putting items in alphabetical order.