legal holdLitigation is serious business – but it’s no excuse for excessive billing or endless paper trails. One vital component to effectively and efficiently manage a case is the Legal Hold. Whether you’re a private party or a large corporation, everyone involved in a legal matter will come face to face with Legal Holds. Unfortunately, they are underutilized and misunderstood, often at your expense.

Simply put, a Legal Hold sets forth the obligations of a business or individual to preserve information that may be potentially relevant to either impending or ongoing litigation. In the past, clients would dig through their filing cabinet and hand over a box of musty records, illegible carbon copies and remnants of check stubs. Today’s “plugged in” technological climate has taken the preservation and collection of client materials to a whole new level.

In 2006, the Federal Rules of Civil Procedure were amended to address the fact that vast amounts of evidence were being stored in electronic form. That evidence was dubbed ESI, or Electronically Stored Information. As a result, our rules were re-written to require that all evidence, including ESI, be preserved. ESI includes e-mails, word processing documents, spreadsheets, databases, calendars, voice mail, Internet usage files, and internal messaging systems, among other items. If it’s stored or communicated electronically, it’s discoverable in litigation. Thus the Legal Hold was born. Since 2006, State and Federal courts have applied strict standards that require the preservation of both paper documents and ESI and have imposed severe sanctions in cases where a party fails to do so.

The most critical reason for issuing a Legal Hold is to suspend any and all destruction of data and documents. Preserving your information is just as important as collecting it. A Legal Hold requires that parties preserve all potentially relevant information, which prevents the loss of evidence and significantly reduces the risk of court-imposed sanctions and recovery costs.

A Legal Hold is typically issued in the form of a written memorandum and is directed to either the individual or corporation who may have relevant records in their possession. The Legal Hold puts those individuals or entities on notice and preserves the integrity of data that may later be produced in the discovery process. While a Legal Hold certainly can’t prevent a party or witness from tampering with evidence, it preserves counsel’s right to seek sanctions should they do so.

The Legal Hold is the first and often most crucial step in the case management process. After a general Legal Hold has been issued, the legal team works with the client to identify potential Records Custodians, or individuals who may have information relevant to the case. Everyone from top-level executives to administrative support staff should be considered a potential Custodian. In most cases, the Custodian’s duty to preserve records is considered ongoing and should continue until the litigation is resolved.

A Legal Hold is the launch pad for the preservation and identification of potentially relevant evidence. It opens the door to meaningful dialogue between clients and counsel and allows the legal team to begin to address issues that will be raised throughout the discovery process. Asking yourself the following questions now will allow your attorneys to appropriately manage your litigation and costs:

What types of information do you have? (e.g. paper documents, Electronically Stored Information)
Where does your data exist? (e.g., file cabinets, warehouse, laptops, tablets, Smart Phones, off-site computers, voice mails, backup tapes, flash drives)
Is there any archived data on backup systems?

Although issuing a Legal Hold to your staff may seem onerous, the process doesn’t have to be the technical death trap you envision. A Legal Hold will help your attorneys properly evaluate your case, mitigate your risk and keep your legal fees down, resulting in more streamlined, efficient and effective litigation.