1. Legal Holds: Educating Company Employees About Document Preservation
REUTERS / Clodagh Kilcoyne
November 17, 2016
Panelists:
Jeffrey Nass, Senior Counsel in e-Discovery, Boehringer Ingelheim
Ruth Marshall, Managing Editor, Practical Law (Moderator)

2. Agenda
Introduction
Presentation: Legal Holds: Educating Company Employees About Document Preservation
The Purpose of a Legal Hold
Drafting a Legal Hold Notice
Communicating the Legal Hold
Training Employees How to Identify Relevant Information
Properly Preserving and Collecting Relevant Information
Responsibilities of In-House and Outside Counsel
Quick Review of Practical Law Related Resources
Q&A Session
Conclusion
Legal Holds: Educating Company Employees About Document Preservation

3. The Purpose of a Legal Hold
Legal Holds: Educating Company Employees About Document Preservation

4. The Purpose of a Legal Hold
What is a legal hold?
A legal hold:
Is an instruction within a business organization.
Directs employees to preserve, and refrain from destroying or modifying, certain records and information.
A legal hold helps companies ensure that they preserve relevant information that they are obligated to preserve, including relevant electronically stored information (ESI) and its accompanying metadata.
Legal Holds: Educating Company Employees About Document Preservation

5. The Purpose of a Legal Hold
What Triggers a Company to Issue a Legal Hold?
A company should implement a legal hold when it:
Reasonably anticipates litigation.
Receives a complaint.
Is put on notice of a lawsuit or potential legal claim against it.
Receives a non-party subpoena for information.
Receives a formal order of investigation from a US regulator.
Decides to initiate a lawsuit.
Legal Holds: Educating Company Employees About Document Preservation

6. The Purpose of a Legal Hold
What Triggers a Company to Issue a Legal Hold? (cont.)
A company may need to start preserving information when:
The company sends or receives a cease and desist letter.
A whistleblower makes a complaint to management.
A visitor on the company’s premises files an accident report.
The company encounters a situation that historically resulted in litigation or a government investigation.
Legal Holds: Educating Company Employees About Document Preservation

7. The Purpose of a Legal Hold
Consequences of Failing to Implement and Maintain an Adequate Legal Hold
A court may sanction the company for failing to preserve ESI if:
The company failed to take reasonable steps to preserve relevant ESI.
The ESI is lost.
The ESI cannot be restored or replaced through additional discovery.
(FRCP 37(e).)
Legal Holds: Educating Company Employees About Document Preservation

8. The Purpose of a Legal Hold
Consequences of Failing to Implement and Maintain an Adequate Legal Hold (cont.)
If ESI is lost and cannot be replaced:
If a party is prejudiced by the loss of ESI, the court may order sanctions no greater than necessary to cure the prejudice.
If the court finds that a company acted with the intent to deprive another party of the ESI's use in the litigation, the court may:
presume that the lost ESI was unfavorable to the company;
instruct the jury that it may or must presume that the lost information was unfavorable to the company;
dismiss the action if the company is the plaintiff; or
enter a default judgment against the company if it is the defendant.
(FRCP 37(e).)
Legal Holds: Educating Company Employees About Document Preservation

9. Drafting a Legal Hold Notice
Legal Holds: Educating Company Employees About Document Preservation

10. Drafting a Legal Hold Notice
Determine What to Preserve
Review the information that triggered the duty to preserve.
Take reasonable steps to preserve information that:
is relevant.
the company "knows or reasonably should know" an opponent or regulator likely will request.
Legal Holds: Educating Company Employees About Document Preservation

11. Drafting a Legal Hold Notice
Locating Relevant Information
Consider who may possess potentially relevant data, including:
employees;
contractors; and
subsidiaries.
Interview IT representatives and other employees to locate potentially relevant data.
Determine whether individual employees may have potentially relevant information, including on:
smartphones or tablets;
personal accounts;
social media sites, such as Facebook and Twitter; and
the cloud.
Legal Holds: Educating Company Employees About Document Preservation

12. Drafting a Legal Hold Notice
Contents of a Legal Hold Notice
The notice should identify:
The subject matter of the information that the company must preserve.
The types of materials that employees should preserve.
The time frame to which the preservation obligation applies.
Who employees may contact for any questions about the legal hold.
How employees should handle any relevant information that they possess or collect.
Key deadlines for acknowledging the hold and any actions.
Legal Holds: Educating Company Employees About Document Preservation

13. Drafting a Legal Hold Notice
Contents of a Legal Hold Notice (cont.)
The notice should explain:
The recipients’ continuing duty to preserve until further notice.
That the recipients must preserve all relevant data in its original form, without modification.
The importance of preserving potentially relevant materials.
The possible consequences of not complying with the notice.
Remember that the notice itself may eventually be disclosed to opposing counsel or the court.
Legal Holds: Educating Company Employees About Document Preservation

14. Communicating the Legal Hold
Legal Holds: Educating Company Employees About Document Preservation

15. Communicating the Legal Hold
Distributing the Legal Hold Notice Within the US
The company should:
Send the notice from a high level executive or the company’s in-house counsel.
Distribute the legal hold notice to the right people, including:
the individuals who have relevant materials in their possession or control;
the records department;
IT representatives; and
third parties under the company’s control.
Have each recipient of the legal hold notice acknowledge receipt of the hold in writing.
Meet with key custodians to discuss the gravity of the duty to preserve.
Legal Holds: Educating Company Employees About Document Preservation

16. Communicating the Legal Hold
Implementing the Legal Hold Notice Outside the US
When relevant information exists outside of the US, companies should consider:
Where the information is located.
How that country defines personal data.
Whether relevant information contains personal data.
Whether preservation of relevant data violates that country’s privacy laws.
The scope of information to preserve in that country.
Whether to issue a separate legal hold for information held in that country.
Whether to seek any custodian’s consent for disclosure in that country.
Legal Holds: Educating Company Employees About Document Preservation

17. Communicating the Legal Hold
Considerations After Disseminating the Legal Hold Notice
Monitor compliance of each individual who:
received the notice; and
returned a confirmation receipt.
Update the legal hold notice if the company identifies additional:
issues;
locations of relevant information; or
employees with potentially relevant information.
Send reminder notices and:
track the dates of the reminders; and
confirm the recipients' receipt of them.
Document all revisions to maximize defensibility of the preservation process.
Provide notice when lifting the legal hold.
Legal Holds: Educating Company Employees About Document Preservation

18. Training Employees How to Identify Relevant Information
Legal Holds: Educating Company Employees About Document Preservation

19. Training Employees How to Identify Relevant Information
Employee Training about Legal Holds
Train employees at all levels:
as part of employee onboarding;
annually; and
in connection with a specific legal hold.
Explain in plain English:
each employee’s legal obligation to comply with a legal hold;
the company’s legal obligation to preserve relevant information;
the consequences to the company for failing to comply; and
the penalties they may face for failing to comply including disciplinary action employment termination.
Legal Holds: Educating Company Employees About Document Preservation

20. Training Employees How to Identify Relevant Information
Topics to Cover in Training
Training Should Explain to Employees:
The types of information subject to the hold, such as:
paper and electronic files;
calendars, diaries, and handwritten notes;
s; and
voic s.
Where to find relevant information, including company-issued and personal:
computers;
laptops;
smartphones; and
tablets.
Legal Holds: Educating Company Employees About Document Preservation

21. Training Employees How to Identify Relevant Information
Topics to Cover in Training (cont.)
Training Should Explain to Employees:
How they must preserve the information, including:
suspending their destruction of records; and
preserving paper and electronic files.
Who they must contact with questions about the hold.
Additional directions on how the employees should handle relevant information.
What happens to their information after collection.
Legal Holds: Educating Company Employees About Document Preservation

22. Properly Preserving and Collecting Relevant Information
Legal Holds: Educating Company Employees About Document Preservation

23. Properly Preserving and Collecting Relevant Information
Preserving Relevant ESI
When initiating a legal hold, the company must:
Immediately stop all automated document disposal processes that may affect relevant data.
Determine whether any information is at risk of deletion by employees. If so, take immediate, covert steps to secure their information.
Assemble a team to oversee the process, which may include:
key employees from affected business units;
employees from the company's information technology (IT) and records departments;
in-house counsel or a high-level company executive; and
outside counsel.
Legal Holds: Educating Company Employees About Document Preservation

24. Properly Preserving and Collecting Relevant Information
The company may collect relevant information with assistance from:
the IT and records departments;
outside counsel; and
an outside vendor.
Consider the risks of self-collection, including:
lack of defensibility;
self interest motivations;
improper collection; and
inconsistent interpretations of scope and relevance.
Track the chain of custody.
Legal Holds: Educating Company Employees About Document Preservation

25. Properly Preserving and Collecting Relevant Information
Additional Considerations when Collecting ESI
When collecting ESI, the company must:
immediately stop any routine data destruction;
preserve the files’ metadata and any embedded text;
preserve the files in their native format; and
retain any original software if later upgraded.
The company should use IT personnel or outside vendors to collect the ESI to ensure proper collection.
Legal Holds: Educating Company Employees About Document Preservation

26. Responsibilities of In-House and Outside Counsel
Legal Holds: Educating Company Employees About Document Preservation

27. Responsibilities of In-House and Outside Counsel
In-house counsel responsibilities
In-house counsel should:
Appoint a specific person to be responsible for the legal hold notice including:
monitoring employee compliance with the notice;
revising the scope of the notice;
informing recipients of any scope changes;
sending the legal hold notice to additional employees throughout the duration of the hold;
circulating regular, periodic reminders;
documenting all revisions and reminders; and
lifting the hold.
Maintain contact information for any departing employees who had access to or custody of relevant documents.
Legal Holds: Educating Company Employees About Document Preservation

28. Responsibilities of In-House and Outside Counsel
Outside counsel responsibilities
Outside counsel should:
Remind the company of its obligation to preserve information:
at the start of an engagement;
as soon as a triggering event occurs; and
throughout the engagement, particularly if the scope broadens.
Draft or review the legal hold notice.
Help in-house counsel oversee the information collection process.
Interview key custodians to identify the location and types of relevant information.
Meet with the company’s IT and records department.
Work with in-house counsel to ensure compliance with the hold.
Legal Holds: Educating Company Employees About Document Preservation

29. Practical Law Related Resources
Available with a Free Trial to Practical Law
Litigation Hold Toolkit, including:
Practice Note
Practice Note, Implementing a Litigation Hold
Standard Documents
Standard Document: Litigation Hold Notice
Standard Document: Litigation Hold Reminder
Standard Document: Litigation Hold Lift Notice
Standard Document, Litigation Holds: Presentation Materials
Checklists
Litigation Hold Checklist
First Steps for Identifying and Preserving Electronic Information Checklist
Legal Holds: Educating Company Employees About Document Preservation

30. Q&A Session
Legal Holds: Educating Company Employees About Document Preservation

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