What Is a Litigation Hold and Why Does It Matter?
A litigation hold — also called a legal hold or preservation notice — is a formal directive instructing relevant employees to preserve all documents, data, and communications related to actual or reasonably anticipated litigation. The duty to preserve arises when litigation is reasonably anticipated, not just when a complaint is filed.
The legal standard is well-established: failure to preserve evidence that should have been preserved, when the party knew or should have known it was relevant, constitutes spoliation. Sanctions range from cost-shifting and adverse inference instructions to case dismissal in egregious cases. The trend in federal courts is toward stricter enforcement, not more lenient.
The trigger is "reasonable anticipation" of litigation — not receipt of a complaint, not service of process, and not formal discovery requests. Internal discussions about potential litigation, receipt of a demand letter, or knowledge of an incident likely to result in claims can all trigger the duty. When in doubt, consult legal counsel immediately.
The 7-Step Litigation Hold Process
Identify the Trigger Event
Document exactly what created the duty to preserve — the demand letter, the internal memo discussing anticipated litigation, the incident report, or the complaint itself. Include the date and the specific information that put you on notice.
This documentation is your foundation. If you're ever challenged on when the hold should have been issued, you need a clear record of when the duty arose and what steps followed.
Define the Scope of Preservation
Work with legal counsel to define: the relevant time period, the subject matter of the dispute, the likely custodians (employees with relevant information), and the data types that must be preserved (email, documents, databases, mobile devices, collaboration tools like Slack or Teams, voicemail, text messages).
Err toward over-inclusion on scope. It's easier to argue you preserved too much than to defend a gap in preservation. Under-inclusive holds are where spoliation claims are born.
Identify Custodians and Data Sources
Generate a complete custodian list with job titles, departments, and the specific categories of information each custodian likely possesses. For each custodian, map their data sources: corporate email, personal email if used for business, laptop, desktop, shared drives, cloud storage, mobile devices, and any relevant third-party platforms.
Don't forget non-custodian sources: server logs, databases, backup tapes, and cloud repositories that contain relevant data but aren't owned by a specific individual.
Suspend Automated Deletion Processes
Most organizations run automatic email purge policies — deleting emails older than 90 days, or archiving and deleting on a rolling schedule. These policies must be suspended for all custodians under hold, for all relevant data sources, immediately upon issuance of the hold.
Failure to suspend auto-deletion is one of the most common and damaging hold failures. The fact that deletion was automated is not a defense to spoliation if you should have suspended the process.
Issue the Hold Notice in Writing
Send the hold notice to each identified custodian and relevant IT personnel in writing, via email with read receipt, or via your legal hold management system. Verbal holds are not defensible. The notice must clearly explain: what litigation or matter is involved, what types of information must be preserved, what time period is covered, the custodian's specific obligations, who to contact with questions, and the consequences of non-compliance.
Request acknowledgment from each recipient. Track who has acknowledged and who has not. Follow up with non-responders at 5 and 10 days. Document all of this.
Conduct Custodian Interviews
For key custodians, conduct structured interviews to understand their data landscape — what systems they use, where they store work product, whether they use personal devices or accounts for business purposes, and whether they're aware of any documents specifically relevant to the matter.
Document these interviews contemporaneously. The interview record becomes part of your defensibility file and demonstrates that you took reasonable steps to understand the scope of preservation.
Monitor, Renew, and Document Ongoing Compliance
A hold issued once is not a hold maintained. Renew the notice periodically (quarterly for active matters, more frequently for high-stakes cases). Send reminder notices when custodians change roles, when new custodians are added, or when the scope of the matter expands.
Maintain a complete hold file: the original notice, all acknowledgments, all renewal notices, all IT suspension confirmations, and all custodian interview records. This file is your proof of due diligence if your preservation process is ever challenged.
The 5 Most Common Hold Failures
These are the mistakes that show up repeatedly in spoliation sanctions opinions. Each one is preventable.
- Issuing the hold too late — after auto-deletion has already run, or after employees who knew about the dispute had already cleaned up their files.
- Forgetting mobile devices and collaboration tools — Slack, Teams, WhatsApp, and personal email are where key communications often live and are almost always missed in first-generation holds.
- Failing to suspend backup tape recycling — if your backup tapes overwrite on a 30-day cycle and you don't suspend them, potentially relevant data is destroyed every 30 days.
- No acknowledgment tracking — sending the notice without tracking who received and acknowledged it means you can't demonstrate actual notice to individual custodians.
- Releasing the hold too early — settling a case doesn't automatically extinguish preservation obligations if appeals or related matters are pending. Confirm with legal counsel before releasing any hold.
Legal Hold Technology: Do You Need Software?
For organizations with more than a handful of matters per year, purpose-built legal hold management software — platforms like Exterro, Onna, or similar tools — automates acknowledgment tracking, reminder notices, and custodian interview workflows. The investment is typically justified at 5+ active holds annually.
For smaller organizations or infrequent matters, a disciplined email-based process with careful documentation is defensible. The process matters more than the tool.