The duty to preserve evidence once litigation is reasonably anticipated is not new. What has changed is the level of scrutiny organizations face regarding whether that obligation was met, and whether they can demonstrate that it was met.
Much of that scrutiny traces back to a landmark preservation dispute involving Morgan Stanley in the mid-2000s. The case centered on preservation failures that included overwritten emails, missing backup tapes, and searches the company represented as complete but later proved insufficient. The court found spoliation, the improper destruction or alteration of evidence, and shifted the burden of proof against the company before the underlying dispute was even decided on its merits.
Shortly afterward, preservation obligations became more formally embedded in the Federal Rules of Civil Procedure and, over time, across many state court systems as well. Today, the obligation to preserve evidence generally arises once litigation, a government investigation, or a regulatory inquiry is reasonably anticipated, not when a lawsuit is officially filed.
What a Legal Hold Actually Is
A legal hold is the process organizations use to meet their preservation obligations.
While individual processes vary, legal holds typically involve three core stages:
1. Identify the Obligation
Legal teams determine what information may be relevant to a matter and identify the individuals who possess or control that information.
2. Notify and Preserve
Those individuals, commonly referred to as custodians, receive preservation instructions, acknowledge their obligations, and take steps to retain relevant materials.
3. Manage Through Release
Legal teams track responses, update hold requirements as circumstances evolve, and formally document when preservation obligations end.
The goal is straightforward: create a consistent, documented record of what actions the organization took, when it took them, and who was involved. If a regulator, court, or opposing party later challenges the preservation effort, that record becomes critical evidence of the organization’s process.
What Happens Without a Real Process
Many organizations still administer legal holds using email and spreadsheets.
In a basic sense, the approach can work. Notices are sent. Responses are collected. Records are maintained.
However, several operational challenges tend to emerge over time:
- Manual notice distribution and follow-up consume legal team resources that could otherwise be dedicated to substantive legal work.
- Custodian information becomes outdated as employees change roles, switch managers, or leave the organization.
- Matter records and hold records become disconnected, making reconstruction of a complete matter history difficult.
- Visibility into acknowledgment status is limited, making it harder to identify non-responsive custodians or missed preservation steps.
- Execution varies from team to team, reducing consistency and making governance harder to demonstrate.
None of these challenges are necessarily catastrophic on their own. Problems arise when a preservation effort is questioned and the organization must reconstruct exactly what occurred, often months or years after the fact.
What a Defensible Record Needs to Show
When a legal hold is challenged, organizations generally need to answer a specific set of questions:
- Who received the preservation notice?
- What information were they instructed to preserve?
- Who acknowledged or attested to their obligations?
- What follow-up actions occurred when acknowledgments were not received?
- When did preservation obligations change, and how were those changes documented?
- When was the hold released, and how was that release communicated?
When those answers are scattered across email inboxes, spreadsheets, and manually maintained records, legal teams often face unnecessary administrative effort and increased organizational risk.
A defensible process should make these answers accessible, consistent, and well documented.
This Isn’t Only a Large-Enterprise Problem
Legal holds are often associated with large enterprises and high-profile litigation.
In practice, organizations of many sizes face employment disputes, regulatory inquiries, commercial litigation, and other matters that trigger preservation obligations.
The challenge is not solely the volume of litigation exposure. It is the ability to demonstrate what actions were taken, when they occurred, and who was involved.
That requirement does not disappear simply because an organization is smaller.
Building a Defensible Process
A structured legal hold program built around standardized templates, tracked acknowledgments, documented follow-up, and centralized records creates a stronger foundation for meeting preservation obligations.
The objective is not simply sending notices. It is creating a repeatable and well-documented process that enables legal teams to answer difficult questions when they arise.
Onit Legal Holds helps connect hold execution directly to matter management, allowing hold activity and matter records to remain linked throughout the life of a matter rather than existing as separate administrative processes.
For a deeper look at how a structured approach can improve the legal hold experience, read How Legal Hold Software Supports Litigation Peace of Mind.
