17 Jul 2012

Legal Hold Management: Are Manual Processes Still the Norm?

Posted in: Tuesday Trends 1 Comment

By: Andrew Bartholomew

In e-discovery, the identification and preservation stages set the foundation for a defensible process. Organizations can employ the most advanced technologies for collection, processing and review of electronically stored information (ESI), but failing to adequately identify and preserve potentially relevant evidence will almost always result in sanctions. While this might be old news for many in the legal industry, it appears as if the message is not getting through to all. In a recent eDiscovery Journal (eDJ) survey, 44% of the respondents reported to not utilizing software to manage the legal hold process. The results of the survey were presented by eDJ Director Mikki Tomlinson in her recent article “What’s Trending in Legal Hold Management?

Interestingly, 69% of the survey’s respondents indicated that they understand the importance of the legal holds as the basis for e-discovery defensibility and are well aware of the dozens of sanction cases that underscore the risks associated with incomplete or flawed legal hold processes. Yet, many organizations feel they can handle the process with existing technologies or other internal, homegrown systems. Tomlinson advises companies considering LHM software to, “Approach the products that are after market add-ons (e.g., not the core product line) or are new to market with care. While they are maturing, these products should be fully investigated to determine whether they meet your LHM needs.”

Tomlinson and other experts agree that organizations are exposing themselves to a lot of risk by neglecting to invest in LHM technology altogether as the legal hold process encompasses much more than simply notifying custodians not to delete their ESI. In one of the most well-known e-discovery sanctions cases, Zubulake v. UBS Warburg LLC, (S.D.N.Y. 2003), Judge Shira A. Scheindlin’s ruling not only established that parties have a duty to preserve information as soon as litigation is reasonably anticipated but that legal teams also “must take affirmative steps to monitor compliance.” In other words, it’s not enough for litigants to simply issue legal holds and presume that recipients will comply.  The process must include compliance monitoring and documented safeguards.

This is where companies that rely on homegrown systems, spreadsheets or regular email for managing legal holds can run into problems. In many cases, it’s impossible for legal hold notice issuers to even recognize that the email has been opened let alone whether it was understood and implemented. For this reason, many companies recognize the need to automate many of the manual legal hold steps, such as re-notifying non-responding recipients and sending out periodic reminder notices. Today’s advanced systems can track responses and provide immediate, centralized visibility into the status of all active holds, allowing legal teams to quickly identify issues and deal with them accordingly. Moreover, these systems facilitate hold releases, which is critical for defensible data deletion.

A common problem at many organizations is leaving custodians on hold far longer than what is legally necessary. Organizations that rely on email and spreadsheets often have difficulty connecting custodians to specific matters, so when a lawsuit gets resolved it isn’t always clear which custodians are impacted. Beyond placing an unnecessary burden on the employees who must be careful not to delete ESI on hold, failing to lift legal holds exposes organizations to unnecessary risk since it results in a buildup of discoverable electronic data that could otherwise have been deleted.

The bottom line, organizations regularly involved in litigation and other regulatory or legal activities have access to some of the most advanced options available for automating the legal hold process. This added level of efficiency and defensibility can more than justify for the cost of the investment within a very short time frame and provide a foundation for improving other, equally important legal processes.

To learn more about managing a defensible legal hold process, download Exterro’s whitepaper Five Steps to Overcome Common Legal Hold Mistakes.

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