Legal Holds for Smart Teams: Tips for IT Professionals Working with Legal to Preserve Company Data

As I recently wrote about in Law360, when litigation or a government investigation looms, a corporation has a duty to identify and preserve data (documents or other electronically-stored information) that may be relevant to the matter. This requirement, imposed by the courts as well as government regulators, is known as a “legal hold”  or sometimes a “litigation hold.” It stems from the duty to not destroy relevant evidence that may be required for a judicial proceeding.

Increasingly, courts require legal departments and their outside counsel to supervise the preservation process and to certify that reasonable steps were taken. In most cases, lawyers must rely heavily on Information Technology (IT) professionals to execute the mechanics of the hold and ensure data is preserved correctly. After all, IT knows and works with the company’s systems, networks. And, if legal preservation obligations aren’t met properly, penalties for that failure can be substantial.

In this blog, we provide insight into the respective roles of legal and IT and how they can work together to make the legal hold process more efficient and fulfill the company’s legal obligations.

What Role Does Counsel Play?    

Counsel’s job is to identify a need for a hold, determine the scope of the data required to be preserved and then issue instructions for preservation.

A typical hold process runs like this:

  1. Issue the legal hold as early as possible, instructing key employees and data stewards not to delete or otherwise alter relevant data.
  2. Interview key custodians to determine what data they hold and, in many cases, what they know about the events in the matter or investigation.
  3. Make sure that relevant data from key custodians is preserved, whether collected separately or left in place.
  4. Confirm that automated IT tasks—such as routine deletions—are managed appropriately for preservation needs.
  5. Establish a process to track responses and acknowledgments of hold responsibilities.
  6. Track the hold from beginning to end, releasing the hold when the matter concludes.

For obvious reasons, corporate legal must turn to the IT department for help in managing the hold and preserving data.

What is IT’s Role?   

Working closely with counsel, IT will often be asked to take the lead with respect to the following:

  1. Help identify which people may have data relevant to the matter and are thus subject to the hold.
  2. Identify systems that hold relevant data for consideration.
  3. Help gather (collect) and preserve data from systems and custodians.
  4. Turn off systems which automatically delete relevant data.
  5. Monitor the process to make sure that deletion functions are not accidentally restored.

From the beginning, the legal department must work closely with IT personnel to develop a reasonable data collection protocol, ensure chain-of-custody for all collected and preserved data, execute data gathering tasks, and document all actions with reporting and audit trails to show good faith efforts in executing the legal hold.

Formulating a Hold Process

Legal holds are judicial requirements imposed by courts and regulators. Courts typically are concerned with issues like these:

  • When did a party’s duty to preserve evidence arise?
  • How quickly did the legal department issue litigation hold notices?
  • Was the hold notice written clearly and did it describe the data to be preserved properly?
  • What did recipients of the litigation hold-notice do or say in response to the notice?
  • What further steps were taken to preserve evidence both at the time of the hold notice and in the months or years since?

As you can see, hold considerations are situational and depend on the facts of the matter. While there are no fixed rules for a legal hold process, legal and IT managers should cover the following bases:

  1. Notify key people (often called witnesses or custodians) about the need to preserve data.
  2. When collecting, maintain the integrity of the data to avoid information loss including the files themselves and metadata about the files.
  3. Keep logs to maintain a “chain of custody” for all collected files and metadata.
  4. Follow a process, including using commercial software where appropriate, to track and report on the progress of hold and collection efforts.
  5. Maintain the hold until instructed otherwise by the legal department. When a hold is released, the data under hold can again be managed in accordance with company retention policies.

Ultimately, remember that the hold and collection process is disruptive to company employees, who may not understand why all these efforts are necessary. If you are leading a collection effort that requires you to interact with an employee, take the time to explain what you are doing and why.

Collecting from Enterprise Systems    

IT is often asked to collect key custodian data from one or more enterprise systems. To ensure that this process runs smoothly and that the right data is preserved, legal and IT need to work together from beginning to end.

Has IT suspended routine deletion programs properly? Is relevant data stored in a secure place (whether in place or archived elsewhere) such that the data cannot be inadvertently overwritten?

Typically, legal hold functionality offered in enterprise systems is geared toward the IT side of the process. Few meet the full range of legal hold needs such as integrating with HR, Active Directory or other company identification systems, managing notices, facilitating questionnaires, tracking responses and providing reporting on custodian status, matter details, the state of preserved data and departed employee data.

Many companies are moving to the public cloud, and are using Microsoft or Google to manage email and other productivity-related files. They also do not yet offer fully-functioning legal hold and collection, so IT often relies on third party solutions to fill the gaps so that they can put the organization in a strong, legally defensible position while limiting cost and IT energy.

Using Technology to Manage Legal Holds

For years, legal departments relied on manual methods to track legal hold notices and collection efforts. Email and spreadsheets were the main tools to track hold progress. When questions later arose, sometimes years later, many found that memories had faded or key employees had moved on.

Fortunately, there are well-regarded software platforms to track hold communications, responses, questions, acknowledgments and even collection efforts. While early efforts required local installation and management, modern hold software can be delivered securely from the cloud. Not only are costs lower; IT no longer have to install and maintain multiple, costly point solutions.

The right software platform can help both legal and IT manage holds more efficiently and cost-effectively by automating processes, give legal teams the ability to drive more collection activities and reduce reliance on IT for day-to-day execution and, importantly, lessen custodian disruption.

Mature software also can prevent IT professionals from needing to testify—by automatically enforcing the use of a known and defensible process and workflow, creating audit trails and automating metadata preservation.

Tips for Better Collaboration between Legal and IT

As you can see, when it comes to executing a legal hold and collection, no relationship is more important than that between legal and IT departments. Here are ten ways legal and IT professionals can work together to better manage legal holds.

  1. Start by meeting to discuss the nature of the litigation or investigation. Make sure everyone on the team understands what data needs to be preserved to meet preservation obligations.
  2. Develop a plain-English, written plan outlining issues, key custodians (witnesses), data stewards, and the location of all relevant data including ESI.
  3. Determine where relevant data may be located. Consider non-traditional IT sources like cell phones, social media, instant messaging, and cloud repositories.
  4. Create a plain-language written hold notice to be sent to key custodians and data stewards. Make sure the entire team understands the hold messages.
  5. Develop a collection strategy and timetable to collect data managed by IT, individual custodians and other data stewards.
  6. Make sure that routine (or automated) deletion processes are stopped with respect to relevant data for the legal hold.
  7. Consider using specialized, mature software to manage the legal hold process as a substitute for email, spreadsheets or Word documents. An ideal system will help manage collection as well as notification.
  8. Set a regular monitoring and update schedule so legal can make sure data is being preserved and IT will know that the hold is continuing.
  9. Communicate with outside counsel to make sure data requirements have not changed as the case or investigation develops.
  10. Prepare a hold release process (when litigation has ended) with clear instructions to both individual custodians and data stewards on the interplay between released data and other data preservation obligations (e.g. HIPAA, SEC or Internal Revenue requirements).

To succeed, legal and IT professionals have to communicate and work together from initiation of the hold until it is released at the close of a matter. Through better collaboration, they will make the legal hold process more efficient and fulfill the company’s legal obligations.

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About John Tredennick

A nationally known trial lawyer and longtime litigation partner at Holland & Hart, John founded Catalyst in 2000. Over the past four decades he has written or edited eight books and countless articles on legal technology topics, including two American Bar Association best sellers on using computers in litigation technology, a book (supplemented annually) on deposition techniques and several other widely-read books on legal analytics and technology. He served as Chair of the ABA’s Law Practice Section and edited its flagship magazine for six years. John’s legal and technology acumen has earned him numerous awards including being named by the American Lawyer as one of the top six “E-Discovery Trailblazers,” named to the FastCase 50 as a legal visionary and named him one of the “Top 100 Global Technology Leaders” by London Citytech magazine. He has also been named the Ernst & Young Entrepreneur of the Year for Technology in the Rocky Mountain Region, and Top Technology Entrepreneur by the Colorado Software and Internet Association. John regularly speaks on legal technology to audiences across the globe. In his spare time, you will find him competing on the national equestrian show jumping circuit or playing drums and singing in a classic rock jam band.