When litigation seems likely, the first critical step is preserving data. That process starts with a well-executed legal hold.
Legal holds aren’t optional. They are court-recognized obligations that prevent data loss and help organizations maintain credibility in legal proceedings. When handled carefully, they protect your position and keep disputes manageable. When done poorly, they lead to missing data and legal exposure.
When legal holds apply, who is in charge of them, and how to properly handle them are all covered in this guide.
What Is a Legal Hold?
A legal hold, or litigation hold, requires organizations to preserve relevant data during or ahead of legal proceedings.
It suspends normal deletion routines, ensuring that no data connected to the matter is lost or altered by accident.
Anything that could help or hurt your case is covered in this process, including emails, cloud documents, texts, call logs, shared folders, and paper records. The court expects prompt, thoughtful action. Sanctions or harm to one’s legal reputation may follow failure to issue a legal hold.
When to Issue a Legal Hold
The legal matter duty begins when litigation becomes “reasonably foreseeable,” not necessarily when a complaint or lawsuit is filed.
Examples include:
- A cease-and-desist letter arrives
- An employee files a complaint
- A government agency launches an inquiry
- A company discovers internal misconduct
Even before formal legal action, organizations must act quickly to preserve potential evidence. Delay can lead to serious court consequences.
Who Oversees Legal Holds?
In many organizations, legal teams handle holds. In smaller companies, the role may fall to a general manager or IT lead.
Whoever owns the process must identify custodians, send notices, track compliance, and ensure data is properly preserved throughout the hold.
The most efficient teams rely on legal practice management software to centralize communication, track custodians, and automate key preservation workflows.
The market for legal practice management software has expanded significantly in the last several years. It’s projected to grow at a 14.2% compound annual growth rate (CAGR), rising from $2.37 billion in 2024 to $2.7 billion in 2025.
This surge reflects growing demand for better legal infrastructure, especially tools that streamline processes like matter tracking, holds, and compliance.
Without proper systems in place, miscommunication and data loss become more likely—and courts won’t accept ignorance as a defense.
What Should a Legal Hold Notice Include?
A strong notice must clearly explain what’s happening, why it matters, and what each custodian needs to do right away.
Include:
- A brief case summary
- Types of data to preserve
- Specific timeframes or systems affected
- Instructions on what not to delete
- Contact information for legal questions
Vague or confusing notices lead to mistakes. Clear, direct language makes it easier for employees to comply and avoid penalties.
Common Pitfalls in Legal Hold Management
Even experienced teams can make costly mistakes when executing legal holds under pressure. Missteps often stem from preventable gaps.
Custodians get missed. A single overlooked employee might hold critical emails or texts that change the course of a lawsuit.
Notices lack detail. Without specific guidance, custodians may ignore or misinterpret preservation instructions—and courts rarely excuse that behavior.
No tracking mechanism. Legal teams must know who received notices, opened them, acknowledged them, and actually followed instructions.
Holds are never lifted. Leaving a hold in place too long wastes resources and risks violating other retention or privacy policies.
How Legal Practice Management Software Supports Compliance
Legal practice management software plays a key role in modern legal hold execution—especially when multiple departments or matters overlap.
It helps legal teams:
- Automate hold notices and updates
- Track custodian acknowledgments in real time
- Log every action taken for defensibility
- Coordinate with IT to preserve data immediately
- Maintain clear audit trails for future reference
Centralized systems reduce manual work and ensure you can prove preservation steps if challenged in court or regulatory review.
Legal Frameworks Across Jurisdictions
While “legal hold” may not be explicitly named in every law, preservation duties are baked into rules of civil procedure worldwide.
United States
Under Rule 37(e) of the Federal Rules of Civil Procedure, failure to preserve electronic records can trigger court-imposed sanctions.
Important cases like Zubulake v. UBS Warburg set strong expectations around timely, thorough preservation when litigation is foreseeable.
United Kingdom
The Civil Procedure Rules, particularly Practice Direction 31B, require litigants to manage electronic evidence carefully and proactively during discovery.
European Union
Under GDPR, data can only be retained when justified. However, litigation needs often override deletion rules if documented correctly.
Canada, Australia, Others
Across common law jurisdictions, organizations are expected to preserve evidence early, especially when notified of potential legal action.
Where Legal Hold Fits into eDiscovery
Legal holds mark the start of eDiscovery. They ensure that no relevant data is lost before the collection phase even begins.
Preserving too little, or too late, can cripple your defense and undermine negotiations, especially in complex, data-heavy litigation environments.
Courts now prioritize proportionality in discovery. Early preservation lets you define a narrower, more defensible scope for document review.
Proper legal holds protect both sides of the case from costly surprises and litigation inefficiencies.
Best Practices for Legal Holds
Strong legal holds don’t happen by chance. They come from preparation, collaboration, and the right tools to execute efficiently.
To stay compliant:
- Create a clear legal hold policy
- Assign ownership across legal and IT
- Use software to issue and track notices
- Train employees on hold responsibilities
- Review and release holds when appropriate
Consistency and documentation matter more than perfection. Courts want evidence that you acted in good faith and took preservation seriously.
Risks of Noncompliance
When data disappears after it should have been preserved, judges don’t hesitate to impose consequences on the responsible party.
This may include:
- Monetary penalties
- Dismissal of defenses
- Negative jury instructions
- Loss of public trust or reputation
Even if the error was accidental, you must show reasonable, documented efforts to prevent it, or risk losing key arguments entirely.
Legal holds are not just legal formality. They’re part of the foundation of a defensible litigation strategy.
Ending a Legal Hold Properly
When the legal matter ends, the hold must be lifted. Otherwise, custodians may continue storing outdated or irrelevant data indefinitely.
This can become a liability, especially under privacy regulations that limit unnecessary data retention or require timely deletion.
Send formal release notices with clear instructions. Let employees return to normal data routines without guessing what’s still restricted.
Neglecting this step leads to confusion, waste, and even future compliance concerns.
Why Early Action Makes a Difference
The earlier you identify a legal risk, the sooner you can act—and the more defensible your actions become under scrutiny.
Delays open you up to claims of negligence, especially if opposing counsel finds out data was altered or deleted post-trigger.
Good legal practice management software creates automatic logs of timing, scope, and custodian responses for every legal hold issued.
This history helps prove your team took reasonable, proactive steps even under complex or evolving circumstances.
Final Thoughts
Legal holds aren’t glamorous, but they’re essential. They preserve evidence, build credibility, and keep litigation efforts from falling apart.
The risks of poor execution, lost data, court sanctions, blown deadlines—are too great to ignore or leave unstructured.
Using legal practice management software ensures that each legal hold is tracked, executed, and closed without guesswork or human error.
In legal matters, your first move shapes the whole game. Let that move be strategic, informed, and well-preserved.
