CGOC, a practitioners' forum focused on records retention and preservation practices, and Huron Consulting Group, a provider of financial and operational consulting services, released the results of a “first-of-its-kind survey” on legal holds and eDiscovery practices. The survey focused on corporate practices for preserving information in litigation, identifying custodians of data, communicating legal holds, interviewing custodians and collecting potentially relevant data.

Who Was Surveyed

The survey was conducted among 1000 global companies with annual revenue ranging from US$ 5 billion to more than US$ 150 billion. These companies represent the following industries: biotechnology, chemical, energy, financial services, insurance, manufacturing, pharmaceutical and high tech.

What Was Discovered

The findings highlight the changes in processes and technology and the methodologies used to issue legal holds, manage preservation and conduct eDiscovery. "Increasingly, the vast majority of eDiscovery risk can be linked to the legal holds process," said Jim Mitchell, managing director, Huron Consulting Group. “Corporations are telling us they can't afford not to address this process." A majority of companies surveyed reported that an average of 980 new legal matters are initiated each year, with approximately 5100 open matters at any given time across all industries. Matter types include commercial litigation, government investigations and inquiries, intellectual property disputes, government contract disputes, subpoenas, EEOC claims, employee "slip-and-falls," and mass tort litigation. "Companies are issuing far more holds to larger custodian pools and managing a growing mountain of electronic data, and the advantages of using legal holds software to reduce the level of effort required and associated risk are clearly demonstrated in this report," said Deidre Paknad, CGOC founder and CEO of PSS Systems. Without using legal holds software, legal departments wouldn’t be able to efficiently manage and monitor their holds process, and retain and manage far less data which reduces cost. Key findings in the survey include: * Companies are issuing far more holds and are issuing holds across a greater percentage of open matters and matter types. * Reminders and confirmations of compliance are routinely used as an integral component of the legal hold process. * Accurately scoping the individuals and systems with custody of data is complex and difficult at the outset of any case. * 100% of respondent companies had improved their process and methodologies and had systematized aspects of it. * 80% of respondent companies issued legal holds for every matter, while 20% used risk and case analysis to determine which matters required legal holds. * The use of automated legal holds solutions enables more thorough, consistent processes in those companies that employ them.

eDiscovery and Legal Holds Woes

Corporations strive to mitigate legal risk and reduce costs while aiming to manage their data effectively and accurately. Why the difficulties in preservation? Due to the diversity, ever-increasing volume and scrutiny of data it is more and more difficult to properly manage digital preservation. Taking in to account several legal cases in recent years and the amendment of Federal Rules of Civil Procedure for eDiscovery, companies have increasingly formalized their legal holds process and are more routinely and consistently issuing legal holds as new matters arise. This increase has led to a rapid growth in the number of open legal holds and a significant impact on corporate data management practices corresponding to the number of legal matters companies have. The matters of these holds are also complicated by the fact that they involve substantial detail about the individuals and systems with potentially relevant information that must be tracked and actively managed, often over matter lifecycles of five or more years. While many companies had formal hold policies in place for many years, even those companies have experienced difficulty addressing the expanding requirements and volume of legal holds. As recently as two years ago, managing legal holds in the typical global 1000 company involved only a few matters with a few custodians and little or no electronic data. Today, legal holds and records management involves thousands of matters with tens of thousands of custodians and millions of gigabytes of collected information.

Is There a Solution to the Problem?

Clearly, the intensified legal scrutiny and over-blown volumes of data lead organizations to employ appropriate software for legal holds management, risk management and/or eDiscovery. With automated legal holds solutions, it is far more easier to reduce both cost and risk. Of the companies surveyed, approximately 85% used Atlas LCC legal holds software, while 14% used Access databases and Excel spreadsheets, and the remaining 1% uses a home-grown system. We looked at eDiscovery in much detail during our two-part series titled The Case for eDiscovery. Check it out to get acquainted with other providers in this market. The full report from the CGOC and Huron Consulting Group is available here.