Legal Hold 101: Transforming a Confusing Requirement into a Streamlined Process

A legal hold is the standard document that comes from the in-house counsel of an organization facing litigation, a government investigation, or an audit. The document informs the employees of the company (or even government organization) in question of the anticipated litigation, and outlines their obligation to preserve all relevant information, documents, data, and records.

Delivering the legal hold notice is the first step toward making sure that your employees understand that all related data and files (whether stored on paper electronically) can neither be altered nor deleted. The goal is to ensure all evidence is available for the discovery process before litigation.

When data is deleted that would otherwise be relevant to a litigation case, that unavailable data will be interpreted as unfavorable to you. Furthermore, your company could face legal consequences such as hefty fines, reimbursement of the opponent’s litigation costs, or inferences against the party failing to meet discovery obligations. In the case Knickerbocker et al. vs. Corinthian Colleges, for example, the Colleges were penalized $25,000, and their legal counsel had to pay an additional $10,000.

Time is of the essence. If you aren’t prepared to handle the legal hold process, you will be slow in responding. This can draw out legal proceedings, racking up expenses. In addition, if you don’t identify and notify the relevant employees quickly, there is the possibility that an important document will be deleted.

How does your company ensure that all relevant documents remain unaltered after it suspects litigation may come its way? It seems simple enough, but there is plenty of room for error if you do not have a legal hold strategy (and supporting software) in place — long before it becomes acutely necessary). An integrated legal hold solution and successful legal hold strategy will allow you to: 

• Identify all custodians and create new ones as they become relevant to the case
• Send automatic notifications and reminders 
• Enjoy centralized visibility into legal hold status 

Relevant data and documents can be scattered among a number of people and systems, across multiple departments or various locations. That makes hands-on, manual compliance incredibly difficult and costly. The right legal hold solution will allow you to centralize your documents and data, and integrate with internal systems to quickly identify potential custodians based on up-to-date employee data.