Why Every Business Needs a Legal Hold Plan
A legal hold is a notification sent from the legal team to call for the preservation of documentation and data in light of on-going litigation. Holds can be triggered by criminal charges, subpoenas, audits and other legal situations. Legal holds are designed to prevent the destruction of possible evidence.
Typically, the legal hold process involves identifying custodians of certain data and the location and preservation of the data. However, it isn’t as simple as sending a notification and collecting the data. Companies must determine what data should be saved and where to find it. For large companies, this can be a very complicated task.
Why every business needs a legal hold plan
If data is destroyed (accidentally or otherwise) after a hold is issued, your company could face legal consequences such as hefty fines or coming down on the wrong side of a judgment.
Time is of the essence. If you aren’t prepared to handle a hold, you will be slow in responding to one. This can draw out legal proceedings, racking up expenses. If you don’t identify and notify the relevant employees quickly, there is the possibility that an important document will be deleted.
You can avoid such negative outcomes by having a plan in place before a single hold is ever issued.
For example, a legal hold shouldn’t result in a mad scramble to find documents. Your company should have a strategy in place for handling and preserving information. Having an information governance plan can provide an adequate defense for why certain data (outdated or redundant) must be deleted.
Here are the important steps for issuing a legal hold:
- Identify the custodians of relevant data to issue a notice for preservation.
- Prevent the data from being modified or deleted.
- Make sure all custodians have acknowledged and complied with the notification.
- Prove that data is actually being preserved.
- End the hold and send a notification that normal data practices (including deletion) can resume.
The benefits of an automated solution
Some companies with legal teams are using email and spreadsheets to manage holds. While that approach may work for small firms, it won’t be sufficient for a large firm. Imagine trying to handle tracking and implementation for a company that has hundreds or even thousands of holds.
Handling holds manually can also lead to unnecessary risk. For example, you initiated a hold some time ago, but there wasn’t a proper follow up with a long-gone employee. The collection process is now in jeopardy.
A good legal hold software reduces manual processes and automates communications, tracking, collections, and searches. It transforms the legal hold process to make it much more efficient in the following areas:
1 – Notification and tracking
You need to be able to send notifications to all parties involved and track their acknowledgment and progress. You can send reminders to inform custodians of their legal hold obligation. Having standardized templates for notifications can save time and avoid miscommunication as custodians receive reliable notice of the legal hold.
2 – Collections
Use legal hold software that streamlines the process of preserving data. Custodians can upload their documents into one place, allowing you to obtain relevant data when needed.
A good information governance plan accompanied by a reliable technological solution will save your company time and money.