The proper execution and management of legal holds have long been considered a critical aspect of legal work, and the compliance protocols and strategies deployed by legal teams can significantly impact the final outcome of litigation. But as legal work has evolved over the years and shifted to the crowded and complicated world of electronically stored information (ESI), the margin for error in the process has only increased.
Legal holds may not appear complex or intimidating at face value, but they can become unwieldy without careful planning and preparation. Having a legal hold process in place will help prevent adverse outcomes, avoid legal sanctions, and minimize risk for an organization.
What Are Legal Holds?
A legal hold, also known as a litigation hold, is the process organizations use to inform employees or other relevant parties (each known as a “Custodian”) to preserve their data for anticipated litigation. The duty to preserve evidence can be court-ordered or self-initiated for internal investigations, ongoing lawsuits, or a complaint that could trigger or threaten litigation.
When a legal hold is mandated by law, compliance is critical to avoid fines and court sanctions — just sending out a legal hold isn’t sufficient to satisfy discovery requirements. Once the custodians have been notified, they are required to formally acknowledge the hold and comply with it. Therefore, having a solution in place that makes the responding process quick and efficient is critical since time is of the essence, and the sooner the hold is communicated, the better.
Senders of legal hold notices are usually the corporate counsel or attorney handling the matter, and the recipients vary from top-level executives to junior-level employees or interns. Sometimes a legal hold will be forwarded to an organization’s IT or legal department and then communicated to the rest of the company or a subset of custodians. In this case, the burden of preservation falls on the recipients (i.e., IT/legal teams). In other situations, custodians might be notified directly by the relevant party, in which case the burden is on the individual custodian to ensure that relevant data is not deleted or destroyed.
The type of data that must be preserved when a legal hold is issued typically includes ESI, such as emails, chat messages, documents stored on computers (e.g., spreadsheets, PowerPoint presentations, and video files), as well as printed papers, reports, and logbooks.
How Should a Legal Hold Notice Be Written and What Should Be Included?
Above all else, a legal hold notice should be straightforward and easy to read and understand. Using standard templates to enhance consistency is recommended, and bolding or italicizing words for emphasis can be useful. The hold should clearly outline to each custodian:
- Why they are receiving the hold.
- Instructions regarding any specified relevant documents that must be preserved — not destroyed or modified.
Preservation also typically requires that custodians stop their routine record-destruction processes, including automatically deleting emails and routine records management purging. Lists of relevant devices (laptops, phones, thumb drives, etc.), as well as file types and examples of documents, should be included.
Three Challenges with Traditional Legal Hold Processes
There are several issues with traditional legal hold processes that can result in data spoliation, non-compliance, and put an organization at risk. These include:
- Manual processes. Manual processes, such as tracking custodians with a spreadsheet, are often time-consuming and prone to human error. Because custodians do not always respond immediately when they receive a legal hold notice, following up and re-notifying is frequently required. Remember, it is the recipient’s responsibility to confirm that custodians have received the hold, remind them to preserve data, and make them aware of the ramifications of non-compliance.
- Software fragmentation. Utilizing different software platforms during the process can lead to fragmentation and increased security vulnerabilities. An integrated tool is a better choice since all the work can be kept securely in one place. It is also more cost-effective.
- Scalability. Many larger organizations face constant, ongoing litigation (or the threat of it) and must handle many legal holds simultaneously. Since each individual matter might involve hundreds of custodians, the process can quickly become unmanageable. For this reason, having a tool that grows with your organization to administer and organize legal holds is critical for scalability.
Software with legal hold functionality helps manage the process by automating the process of issuing the holds, sending notifications and reminders, interviewing custodians, monitoring compliance, tracking progress, and preserving relevant information.
To learn more about how the Everlaw platform can accelerate your legal hold process without increasing risk and compromising defensibility, request a demo today.