Getting A Hold On Legal Holds

Especially since the late-2006 e-discovery amendments to the Federal Rules of Civil Procedure, companies are grappling with the appropriate scope of legal holds and the methods to identify, retain and harvest information that reasonably may be relevant to actual or potential litigation. Appropriate to the times, CGOC and the Huron Consulting Group have just released the results of a survey on legal holds and the e-discovery practices of 1,000 global companies. While software solutions appear to help when it comes to the increasing burdens of legal holds, companies should not let the human assistance of counsel get lost in the shuffle.

The survey, which goes by the title "Benchmark Survey on Practices for Legal Holds in Global 1000 Companies," primarily centers on practices for preserving information for litigation, identifying data custodians, communicating legal holds, interviewing custodians of information, and harvesting potentially relevant data. The survey focuses on relatively large companies, as their average annual revenues range from $5 billion to in excess of $150 billion. The companies fall within the high-tech, financial services, insurance, biotechnology, chemical, energy, manufacturing and pharmaceutical sectors.

In reflecting on the survey results, Jim Mitchell, a Managing Director of Huron, notes that the "the vast majority of e-discovery risk can be linked to the legal hold process." Indeed, he elaborates that "corporations and their law departments continue to work to mitigate risk and reduce costs while at the same time they must manage their data effectively and accurately."
Nevertheless, he adds, "difficulties in preservation continue to increase due to the diversity, ever-increasing volume, and scrutiny of data - corporations are telling us they can't afford not to address this process."

With the e-discovery amendments to the Federal Rules of Civil Procedure and recent court decisions, companies more and more are formalizing the process behind legal holds and increasingly are sending out legal holds with respect to legal disputes. Of course, this has led to an increase in the sheer number of open legal holds, which has had a corresponding effect on corporate data management practices, as information relevant to legal disputes must be tracked and actively managed - at times for years. In fact, a majority of the surveyed companies have reported an average of as many as 980 new matters opened each year that could require legal holds. And what must be preserved will differ case by case.

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Source: Mondaq
By: Eric J. Sinrod