Had an interesting chat with Brad Harris from Legal Hold Pro today about their new legal hold notice software-as-a-service offering. Tools to simplify and standardize the legal hold notice process are long overdue, and their offering seems timely, given the recent Scheindlin decision. Today most of my clients use a mishmash of home-grown email-based processes, although there are other interesting approaches to this problem available in the market too.
As we discussed the pricing model for the service, I was struck with the idea that this model might inadvertently drive useful behavior around legal holds. Here’s why.
Today, large companies issue large volumes of legal hold notices – never to revisit and release them. Why? It’s a pain in the butt. Regardless, it’s a bad thing, for three reasons:
- The legal hold treadmill. Organizations that continue to unnecessarily hold data after a case is resolved open themselves up to having that data pulled into future cases – creating a treadmill that can be very difficult to get off of.
- Nobody can do their jobs. Employees subject to active holds are not managing information. Records management rules – including disposition rules – are suspended. As a result, information starts to pile up, systems break down, business starts to grind to a halt. The cost of this is real – check out my earlier post on this topic.
- Risk. With multiple overlapping holds, the risk of somebody somewhere inadvertently getting rid of a piece of responsive data only goes up.
So, why do we do it then? Two reasons:
- Tunnel vision. Most critical legal hold notices at big companies are crafted by outside attorneys. Outside attorneys are paid to represent their clients’ interests in a particular case. For large companies who have dozens of outside firms representing them in hundreds of lawsuits, it is difficult for any one attorney to have (even if they were asked to have) a holistic perspective on the institution, and what the impact of their “hold everything forever” notice might be. The all-encompassing hold notice may be the most defensive posture, and even the most advisable when any one case is viewed in a vacuum, but it harder to justify when viewed organizationally.
- We’re lost. Frankly, most companies have no idea what they have or where it is. This makes it pretty hard to target legal holds to specific information types, systems, locations, custodians, etc. It’s a lot easier to write a couple of lines on a legal hold notice, than to do the hard work of targeting a legal hold in a complex and mismanaged information environment.
So why might outsourced legal hold notice services help with this problem? Well, if companies are now paying per notice/per custodian/per month for active holds, then their is a clear economic incentive to deactive those holds as soon as possible.
Notice: No company mentioned in this post is a client.