Understanding the Legal Hold Lifecycle

Stage 1 – Triggering the Legal Hold: When and Why is it Issued?

An organization must implement a legal hold when litigation is reasonably anticipated. The sooner this step is taken, the better, to ensure immediate compliance and avoid any data loss.

A legal hold can be triggered when:

• The organization receives a notice of a lawsuit or legal claim
• The organization is involved in a government investigation or regulatory inquiry
• There is reason to believe that a legal dispute or investigation is imminent

After, the organization sends a legal hold notice to employees outlining their responsibilities to preserve all relevant documents and data. The notice explains key details and protects all relevant evidence from being destroyed or altered. This ensures everything remains available for the discovery process in litigation.

The organization can issue a litigation hold internally or through a litigation hold letter from an attorney. Failure to comply with litigation holds can lead to fines, reimbursement of the opponent’s litigation costs, or damage to reputation.

Next, it’s important to understand who is involved in a legal hold. Effectively communicating the legal hold notice starts with sending the initial notification to ensure it reaches all intended recipients.

But who should you be send it to? Stakeholders in a legal hold include individuals or groups within (or involved with) the organization who have access to or control over relevant information.

This includes:

• Employees directly involved in the legal matter: They hold key documents, emails, or data related to the case.
• IT personnel: They ensure the proper preservation of electronic data, like emails and files.
• Legal and compliance teams: They oversee the legal hold process and make sure the right procedures are followed.
• Third-party partners:  Vendors, contractors, or external service providers managing or storing information on behalf of the company.

Stage 3 – Continuous Monitoring for Compliance

The responsibility doesn’t end when you send the legal hold notice. Continuous monitoring for compliance is a critical phase in the legal hold lifecycle. This ensures that custodians consistently follow preservation requirements and avoid accidentally deleting or altering data.

To allow for ongoing monitoring:

• Track custodian acknowledgements: Acknowledgements provide documented proof that custodians understand their duty to preserve information. By tracking responses, organizations can quickly identify any custodians who haven’t received or read the notice. This reduces the risk of accidental data deletion or spoliation.
• Provide ongoing communication and education: Many people involved in a legal hold may be unfamiliar with the process, or they may be part of multiple holds that span several years. Regular communication with custodians about their obligations ensures they continue preserving data for ongoing legal holds. Clear, consistent communication reduces confusion and reinforces compliance.
• Audit data preservation efforts: Monitoring your data sources regularly ensures all relevant information is properly preserved. Regular audits allow you to identify gaps in compliance early, before they become major issues.
• Address non-compliance: When custodians fail to comply with the legal hold notice, take immediate action. Whether due to oversight or misunderstanding, addressing non-compliance promptly with follow-up notices or direct communication mitigates risks and costly errors.

Stage 4 – Releasing the Legal Hold

Finally, when the circumstances that initiated the hold have been resolved or are no longer applicable the hold can be released.

This typically happens in the following scenarios:

• Resolution of litigation: When the legal hold reaches a conclusion, whether through a settlement, dismissal, or verdict.
• Completion of investigation: After completing an internal or external investigation and determining that preserving the related evidence is no longer necessary.
• Change in circumstances: If the nature of the case or the required evidence changes, making the original hold irrelevant.

Releasing a legal hold involves several key steps:

1. Formal notification: Draft and communicate a release notice to inform all custodians and stakeholders that the legal hold has been lifted. Clearly state that the preservation requirements no longer apply and outline any necessary actions.
2. Document the release: Keep a detailed record of the release process, including the release date, recipients, and any relevant correspondence. This documentation is crucial for legal and compliance purposes, showing that the legal hold was properly concluded.
3. Restore normal access: Once the legal hold is lifted, allow custodians to resume regular access to and management of their data. Remove any restrictions or suspensions that were in place during the hold.
4. Continue to monitor for compliance: Continue monitoring for compliance after the release to ensure that data is being managed according to company policies and regulatory requirements.

By following these steps, organizations can effectively conclude the legal hold process and reduce risks associated with data preservation and management.