creating folders in docs
Google Docs has the ability to manage what they call "collections". Think of collections as just folders in which you can organize other documents into. Here's how to create a new folder/collection.
Open up the main Google Docs page and click left click (to highlight) an existing folder that you wish to place your new folder into. In this example we will create a new folder within the main "My collections" folder.
Once the My Collections folder is highlighted, click on the Create New button, and select "collection".
On the "Rename" popup window, type in a name for your new folder, then click on the OK button. In this example the new folder will be called Contracts.
The new folder now appears on the left side of the screen along with any existing folders. Refresh the web page in order to re-alphabetize the folder listing. You are now free to store your docs into the new folder.