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Most companies today have policies in place governing how and when employees should destroy sensitive information.
At a high level, document destruction policies ensure compliance with state, federal, and industry regulations. They also help prevent sensitive documents, like financial and medical records, from accidentally leaking to the public.
However, when a legal investigation or audit is underway, standard document destruction policies may not apply. During this time, it’s critical to protect electronically stored information (ESI) and paper documents that could influence a case. To accomplish this, legal teams may issue holds to their entire organization, specific departments, or individuals.
Read on to learn what legal holds entail, and why they're a critical part of the eDiscovery process.
What Are Legal Holds?
A legal hold is an order that comes from a legal team to an organization or client, informing them not to destroy certain information, and asking them to keep it for a specific period of time.
Legal teams typically issue holds when anticipating litigation. For example, a legal team may catch wind of an upcoming lawsuit, orr a high-ranking executive may come under fire for a batch of emails.There are numerous reasons for issuing holds.
Issuing a legal hold formally instructs key stakeholders to preserve information for access during a case. A legal hold may apply to any form of information, including emails, blogs, call logs, text messages, and social media posts. It can also apply to physical documents like receipts, intake forms, letters, and other similar items.
It’s important to realize that a legal hold is not a court order; rather, it's the legal team’s responsibility to identify a need for a legal hold and issue an order before a case begins.
What Does the Legal Hold Process Look Like?
Despite the massive role that legal holds play in litigation, there are no formal rules governing how legal teams should handle the process. Legal teams are free to form their policies for managing and issuing holds.
With this in mind, here's a general breakdown of what the legal hold process typically entails.
Identifying Relevant Information
Before you can issue a legal hold, you need to identify the information that requires preservation. This can be a difficult task because most workers today wear a variety of hats and work in cross-functional environments. Employees often have their hands in many different processes and roles, and therefore, handle large and complex volumes of information.
As such, legal teams need to have a solid understanding of different roles, functions, and responsibilities within an organization. This helps to expedite the data discovery process and avoid overlooking information ahead of a court case.
In addition to identifying information, legal teams also need to identify the custodians—the people who are responsible for owning and preserving it. For example, a data custodian could be the owner of an email account or a technical supervisor with administrative access to an underlying server. Another example would be an engineer with administrative access to a cloud account or database.
The easiest way to discover data custodians is to enlist the help of the IT department. IT should be able to quickly identify relevant data custodians for each case.
Issuing Legal Holds
Once you understand the information that you need and the people who are in charge of preserving it, the next step is to issue an official legal hold instructing the custodians and stakeholders to preserve information.
Most legal holds today are digital and come via email; however, some legal teams also prefer to deliver paper holds as well. It doesn’t matter how you send a hold, as long as the message gets through to its target recipient.
Keep in mind that after issuing a legal hold, the issuing party also needs to stay on top of the request to ensure its execution. This includes sending reminders and checking with the custodian to make sure the hold is taking place.
After a case ends, the legal team should notify employees and officially release the hold. Failure to do so could result in a situation where a custodian continues retaining records and winds up violating the company’s standing document destruction policy. This could lead to data security and privacy breaches.
To prevent this, legal teams should have an official strategy in place that outlines when to release a hold.
Top Challenges of Legal Holds
While legal holds are very important, they can be difficult to manage. Here’s a breakdown of some common challenges that legal teams face during the legal hold process.
In some cases, employees may push back or protest legal holds—especially after violating a law or company policy. For this reason, it’s important to have a policy in place outlining procedures for dealing with difficult, uncooperative, or unresponsive custodians, and enforcing holds when necessary.
Failure to Preserve ESI
Despite the fact that there are no federal legal hold policies, legal teams still have a responsibility to protect information. For example, FRCP Rule 37 (e) outlines repercussions for failing to preserve ESI.
According to FRCP Rule 37 (e), if electronic data that requires preservation before litigation gets lost due to negligence, and restoration is not possible, the court can take appropriate measures. This may include assuming the lost information is unfavorable to the party, dismissing the action, or entering a default judgment.
As such, it’s critical to attempt to preserve information and do your due diligence. Failure to do so could lead to costly repercussions in court.
Communicating the Hold
It’s very important to communicate legal holds with employees and properly issue them. Failure to issue a legal hold notice could result in negligence.
As a best practice, it’s vital to issue multiple correspondences with employees when holds arise. Always document your outreach and follow up to make sure that employees receive the notification and understand the implications of noncompliance.
Best Practices for Managing Legal Holds
Issue Holds Promptly
It can be difficult to understand when to issue a legal hold. Legal teams often run into trouble because they wait for litigation to commence before issuing a hold. By that time, it’s too late.
It’s a good idea to trigger legal holds immediately after corresponding triggering events. This reduces the likelihood of losing important information.
Form a Compliance Plan
Sending out hold notices is one thing; enforcing hold compliance presents an entirely different set of challenges.
To avoid issues, it’s a good idea to outline a compliance and escalation plan that includes sending reminder notices and informing supervisors when employees are negligent or uncooperative.
Use Legal Hold Software
Managing legal holds can be very challenging in large organizations where there are multiple deadlines and stakeholders to oversee.
To make the process easier, you should consider using legal hold software to eliminate manual processes, improve accuracy, and streamline scheduling and outreach.
For example, Venio Systems offers powerful legal software that handles eDiscovery from end to end. With Venio, your company can make legal holds a core strength instead of a liability.
Venio automates and simplifies complex workflows using AI, and it serves as a one-stop shop for managing ESI. To learn more about Venio Systems, schedule a demo today.
Now that you've read about what a legal hold is, gained an understanding of the process and challenges, and learned some best practices, you can use this knowledge to ensure your company's compliance. Good luck!
About the Author
Justin Reynolds, Akshita Singhal & Lianna Vaughan
This post was written by Justin Reynolds. Justin is a freelance writer who enjoys telling stories about how technology, science, and creativity can help workers be more productive. In his spare time, he likes seeing or playing live music, hiking, and traveling. This post was reviewed and published by Akshita and Lianna, the in-house team of Venio.