SESSION 803
PENALTY: HOLDING ON THE OFFENSE!
EVERYTHING YOU NEED TO KNOW ABOUT LEGAL HOLDS
LEGAL HOLDS: TOP 10 PRACTICE TIPS
Properly executing a legal hold does not need to be an overly complicated or intimidating
process (but often is). However, it does require thoughtful planning and preparation in order to
protect the business. Any dispute with an employee, customer, supplier, competitor or
government agency carries the potential to turn into legal action. Failure to prepare for a legal
hold can result in very serious consequences. However, an effective and defensible process
that works for your business can reduce the chance for adverse outcomes and legal sanctions,
while also minimizing risk to your business and damage to the organization’s reputation.
Here are 10 practice tips for creating a defensible process for executing legal holds:
1. Understand the Preservation Obligation
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Duty to preserve is triggered when there is “reasonable anticipation” of litigation
Being served with a lawsuit or notice of government obligation is certainly a triggering
event, but not the only one
Courts have not established a standard for interpreting “reasonable anticipation;” instead each case is evaluated on its facts and circumstances and may be unique to your
business/industry
Standards differ greatly across circuits, although one consistent theme remains –
reasonable efforts to meet the preservation obligation must include affirmative steps to
ensure preservation of relevant information
Once the obligation to preserve is triggered, several steps are required, but the most
important step is to ensure that relevant data is preserved, including physical records
and ESI, related to the claims at issue in the litigation
Zubulake has taught us that preservation orders do not need to be overbroad, “[there is no duty to] preserve every shred of paper, every e-mail or electronic document, and
every backup tape…such a rule would cripple large corporations
Judge Scheindlin (Pension Committee) “it should be abundantly clear that the duty to
preserve means what it says, and that a failure to preserve…and to search in the right places…will inevitably result in” spoliation
Legal Holds – Top 10 Practice Tips
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2. Create a Legal Hold Plan
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A legal hold process should contain specific, detailed criteria for what events trigger a
legal hold in your business and industry
In-house counsel should err on the side of caution and prudence, balancing business
risk, burden and cost
Be consistent in determining triggers and executing holds in your company
Events that trigger a legal hold can occur at any time; the ability to quickly execute a
legal hold at any time, from anywhere (including remotely and via mobile devices) is
critical
Issuing a written preservation hold notice will only help (not harm) counsel’s process
3. Identify and Interview Custodians
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Quickly identify custodians of relevant documents
Don’t forget third parties, such as outside counsel, IT vendors, consultants, independent contractors, former employees, etc.
Interview custodians (potential or actual) to ensure the proposed scope of the legal hold
is accurate - find out what relevant documents they may possess, and if they know the
location of the relevant documents
Custodians are excellent sources in identifying other potential custodians or sources of
relevant data, but have them advise you of who else should receive the hold notice,
rather than letting them forward it themselves
Whether you cast a narrow or wide net in identification of custodians, make sure your
company’s policy for locating these custodians is documented and followed
4. Issue the Legal Hold – Part I
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Hold notifications should be comprehensive and provide all the essential information
that custodians need to properly perform their role in the legal hold
Issue the hold in a timely manner
Preservation steps must be reasonable, and performed in good faith
Critical elements of the legal hold:
o Clear description of the subject matter of the litigation/investigation
o Detailed guidelines and specific examples of what types of documents are to be
preserved
o Possible sources of data
o Applicable date ranges of relevant data
o Clear statement on what the duty to preserve entails, including an explicit
instruction not to destroy/modify relevant records
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o Notification that the duty to preserve is on-going and the legal hold does not end
until further notice
o Warning of consequences for non-compliance
o Contact information for in-house counsel in charge of issuing/enforcing the legal
hold, invitation to reach out for questions
o Acknowledgement that the custodian has received, understands and agrees to
comply with the preservation notice
5. Issue the Legal Hold – Part II
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Zubulake taught us that issuing the hold is not enough, counsel must take affirmative
steps to search for and identify relevant data
Legacy searches may not be reasonable; certain courts have held that keyword searches
are no longer the favored methodology
Consider advanced technology to enhance defensibility
Beware that asking custodians to self-collect or identify relevant data can be risky (and
may not be viewed favorably by courts)
Don’t overlook ESI in the cloud, on social media sites and in rich media (evolving area of law)
Don’t forget about the passive destruction of documents, including regularly scheduled deletions and erasures – suspend automatic purges and deletions, even if contrary to
the current document retention policy
Follow up with non-responsive custodians
6. Utilize Templates
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Developing legal hold templates can ensure that all necessary information and
instructions are included, and that notifications can be issued consistently and in a
timely manner
Create and use templates that suit your business
Types of templates can include:
o Preservation notices
o Custodial acknowledgements
o Reminders
o Re-issues
o Release
o Tracking and records of preservation instructions
Create them before you need them
Check supplemental materials and ACC resources for samples
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7. Communicate Regularly with Custodians
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Establish open channels of communication that make it easy for custodians to ask
questions
If a hold is in place for an extended amount of time, re-issue the preservation notice and
require custodians to re-acknowledge their receipt and intent to comply
Evaluate whether the legal hold needs to be narrowed/expanded to address new
information in discovery, or if new custodians are identified (especially after meet and
confer)
8. Release the Hold
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Legal holds associated with litigation must remain in place for the life of the litigation
(including appeal)
Limit the release to a specific legal hold, not a release of ALL legal holds
Reiterate time period and date range for release of relevant documents
Provide legal department contact information for questions regarding the release
Resume compliance with company’s normal document retention and disposition policy
Track the release of the legal hold, including its custodian notifications and
acknowledgements
Unless required for other pending or related matters, custodian data should be deleted
in accordance with normal retention and disposition policies, but documentation of hold
notifications and responses (or non-responses) needs to be retained and preserved
9. Document Your Processes
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If you decide not to issue a legal hold, make sure that you document the information on
which the decision was based and the rationale for not doing so
Assume you will be required to provide documentation of each and every step of the
legal hold process to demonstrate that proper procedure was carried out in a timely
manner
Be prepared to show proof that a good faith effort was undertaken to preserve
documents
Maintain an audit trail in the event that any phase of the legal hold process requires
validation
Key events should be tracked for each custodian, including issuance of the preservation
notification, custodial acknowledgements and responses, reminders, re-issues and
release
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Manual documentation and tracking may be burdensome (and error-prone); consider
automated solutions not only to simplify the process but to reduce the risk of human
error
Practical tips when considering a third party legal hold software solution:
o Easy to use and user-friendly
o Real-time updates on legal hold status
o Ability to issue/manage a legal hold remotely or via mobile device
o Highly secure, not just for data security, but permission and role-based access
controls for users
o Credible solution providers that have an established track record of legal and
technical expertise, and long-term commitment to the legal industry
10. Be Prepared
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Preparation is key - this is really just a combination of practice tips 1-9 above
Understand the preservation obligation and your company’s plan/process for
implementing legal holds
Have a good legal hold template ready to go, BEFORE you need it
Follow up and re-issue legal holds if necessary
Document your preservation attempts
Lack of defensible processes can severely damage a case - evidentiary sanctions, adverse
jury instructions, default judgment/dismissal, fines and negative media coverage
Courts have repeatedly made it clear that neither negligence nor ignorance are
acceptable excuses – failure to properly execute a legal hold can result in severe
consequences and serious business risk
“The Separation is in the Preparation” – Russell Wilson, Seattle Seahawks QB
While meeting the preservation obligation can be a daunting task, taking reasonable steps to
ensure a defensible process in preserving relevant data is essential. Creating a systemized and
repeatable process to be used across all cases will only enhance the defensibility of process and
remove the pressure of ad hoc processes.
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