E-Discovery Resource Guide
How to Overcome Common Legal Hold Mistakes
Executive Counsel May/June 2009
In the wake of recent court rulings, many businesses are having to rethink their litigation hold strategies or face potentially dire consequences. The hallmark of a defensible litigation hold strategy is a consistent and repeatable process that ensures the preservation and ultimate availability of all relevant paper and electronic information.
A strong hold process ensures that key data is not destroyed and that employees maintaining that data, as well as technologists supporting the back-end operations, are properly notified.
The process is complicated. Typically it involves many people and large amounts of data in a variety of forms in more than one location, often worldwide. The variety of employee work environments — home, office, mobile, remote — also poses significant challenges.
Some organizations believe that by maintaining a simple generic legal-hold policy with broad time frames and generally best practices, such as identifying custodians and highlighting possibly relevant document repositories, they can avoid adverse consequences. But in today’s climate, unless the company has a narrowly tailored policy that provides employees with correct detailed protocols for notification, follow-up and tracking, the courts may find that the company’s policy is inadequate. Legal teams should establish clear directives and maintain clear records of their litigation hold processes.
Some teams continue to manage their legal holds with Excel spreadsheets and manual processes. Using a staff list, they identify individuals for follow-up, and then they record the dates on which communication is initiated and completed, as well as the information. For some companies this is appropriate, given their size and presumably modest degree of litigation involvement.
But for a company with hundreds or thousands of cases pending and hundreds or thousands of potential document custodians within their organizations, something more robust is required if they are to be able to defend their practice in court.
For these companies, the numbers of people and issues potentially involved in litigation requires well-orchestrated coordination, from notification of the hold through collection and review.
The process should be automated, repeatable, consistent, and ultimately defensible, and it should include timely electronic reminders bearing verifiable date stamps. It also should be applicable to any case, regardless of jurisdiction or subject matter, and it should be accessible and reviewable by both legal and IT personnel from any location. A successful legal-hold strategy entails broad-based management, transparent technological infrastructure and cross-departmental collaboration.
For companies needing a comprehensive, defensible solution, here are five steps to take:
1) Coordinate collaboration at the highest executive levels, including the general counsel, chief technology officer and the chief administrative officer. A successful legal hold compliance program is definitely driven from the top down. There must be complete buy-in from a diverse senior team that understands the technology infrastructure and can seamlessly integrate legal with the IT department.
Records managers can monitor the flow of information, IT experts can process that information and legal personnel can determine relevance. All accountable parties need to have access to the necessary information.
2) Identify potentially relevant data and preserve it when the hold goes into effect. Without a coordinated approach to determining which systems or repositories contain relevant information, most corporations will default into “save everything” mode, which drowns them in a sea of unnecessary information.
Decisions about which systems to put on hold, what data to house and which are the relevant time frames will be based on how the company is organized into divisions, the nature of the matter and which employees are potentially implicated.
Since the relevant systems tend to be scattered throughout the company, detailed data maps and an ability to discuss document retention policies are key. Early strategic collection will minimize duplication and dramatically reduce the data set.
3) Issue an effective legal-hold notice. Spamming an organization with legalese will not make your legal hold effective. It can certainly be in an e-mail, but the message must clearly convey the potential impact on the company and stress the need for compliance. It should also provide concrete instructions for compliance and include contact information for team members who can answer questions that arise.
Decide carefully who will send the notice. Compliance is increased when the directive comes from someone with authority. Employ ees should know they need to take this matter seriously or risk dire consequences. Often, the sender is someone from the general counsel’s office, or from a predefined legal communication mailbox. The choice will depend on the corporate culture.
The IT manager then needs to coordinate with the sender to identify individuals who may have the requisite information and help set the process in motion as systematically as possible. For remote users and laptop users who store information on local drives, the communication should include information about what to do and what not to do with this information. The goal should be a reasonable investigation and a proper evaluation of the relevant facts and circumstances.
To insure the proper impact, these notices should be reissued on a regular basis. They should make clear that the project is a collaborative effort involving all the responsible individuals and departments, and that responsiveness is critical.
4) Collect the data. Retrieving relevant information when there are a variety of forms of electronic evidence in disparate locations is a significant challenge. IT officials can manage it with proper planning. The organization must identify the information sources, bearing in mind that it needs to find all required material in a way that avoids conflict or judicial intervention. Data should be collected early enough to allow for evaluation. Keep in mind there may be long-term benefits from collecting data in native format, if there is the potential for reuse in future litigation.
Cull the data in advance to enhance the efficiency of review and production, and maintain strict records to ensure defensibility.
The system of retention and subsequent collection should be consistent and repeatable. In the current legal environment, in which there may be litigation over discovery issues rather than the merits of the case itself, this is essential. Problems in the discovery process could influence the case and force concessions that otherwise would not be necessary.
On the other hand a well orchestrated process can lead to a better understanding of the substantive issues and help the case.
5) Establish and maintain your project plan. As the adage says, “Measure twice, cut once.” Make a detailed project plan for dealing with data custodians who have potentially relevant information and see that it’s followed. Put that plan in writing. Thoroughly explain it to the IT team, which must then work closely with the legal team.
Getting them both to speak the same language can be a challenge. They must feel a sense of shared ownership in the outcome and apply their distinct skills to the project, from notification and preservation to follow-up.
The legal team must get past its frustration with the pace of technology in the face of enormous volumes of data. It also needs to feel comfortable communicating with its counterparts in human resources and other business units, and be ready to deal with the tendency of disconnected teams to operate in fire fighting mode when they are addressing legal concerns. Ultimately the goal is to transform the issue from a legal quandary to a business-process concern, and developing and sticking to a project plan is the best way to accomplish this.
For companies facing more than occasional litigation, automating the process eliminates human errors, produces faster response time for requests and increases consistency, and thus decreases exposure to potential sanctions. With a robust automated system powered by sophisticated software, legal teams can quickly identify who received the hold, when they received it, when the data was collected, when reviewed and when ultimately produced. Being able to explain what was done, and when, in a credible way to a court will help avoid a devastating problem in the future.
Laura M. Kibbe is the Director of Electronic Discovery Services for Thomson Litigation Consulting. She was formerly senior corporate counsel at Pfizer.
Bobby Balachandran is the CEO of Exterro, Inc., a provider of workflow technology and automation solutions for legal-hold and discovery management.
