Whenever e-discovery and healthcare litigation and investigations come up, you can almost always count on the topic to include a discussion of sanctions. That’s not an accident. There has been an uptick in both the volume of filings asking for discovery sanctions and orders granting those requests. And, for better or for worse, these trends don’t seem to be at risk of abating.

The most common ground for these filings? A failure to take reasonable steps to preserve potentially relevant documents and data. Lawyers that aren’t mindful of their preservation obligations may expose their clients, and themselves, to significant sanctions because they didn’t take appropriate steps under the circumstances to ensure that potentially relevant information is preserved.

The best protection against the threat of sanctions is to institute a legal hold—i.e., to take prompt, affirmative, and reasonable steps to ensure that your client is properly preserving potentially relevant information. As you probably know, the legal hold starts with the prompt distribution of the eponymous legal hold memo. (Be careful not to think of this memo as the beginning and end—it’s better to think of the legal hold not as a single box to be checked, but a process that spans the life of any particular matter.)

At its most basic, the memo is the directive sent to each person with control over information that is in your client’s possession, custody, or control—a/k/a a “custodian”—that explains to them (in plain English—for example, steering clear of words like “eponymous”), the who, what, when, why, and how of preservation.

Of course, the legal hold memo should avoiding sending the message that everyone that might have anything should just save everything forever. While that might be easier in the short-term, it’s neither practical nor in any healthcare company’s best interest to try to save everything. Preserving information comes with both hard and soft costs, ranging from storage space and operability of computer networks to the business interruption and hassle of having to wade through an ever-expanding sea of data.

So if the “save everything” approach is out, what should the legal hold notice say? Let’s talk about the who, what, when, why, and how, which will of course depend on the circumstances and the particular controversy at issue:

• The Who. To figure out who needs to receive the legal hold notice, you’ll need to invest some time at the outset to figure out what the matter is about and what people have control over the relevant documents or systems. If you have a complaint, demand letter, or subpoena, start there. With that rough sketch, it’s a best practice to then follow-up with interviews to talk with key players, figuring out not just what their perspective is on the merits of the controversy, but also where potentially relevant information might reside. And when you are doing this, don’t forget that your employees are just one possible group of custodians. There may be third parties—lawyers, accountants, etc.—that need to receive the legal hold notice.
• The What. Obviously, you should take care to explain what the dispute is about and what categories of information need to be preserved. The goal, of course, is to arm the recipients of the hold with the information they need to realistically determine whether any particular piece of information is subject to the hold. This is the part of the memo that should be edited ruthlessly. Does the custodian need to know the case style or where the lawsuit is pending? Will the custodian understand what “misappropriation of trade secrets” means, or should you just say that Company X claims we stole secret information about their Shiny New Product? In terms of the categories of information that should be preserved, good practice is to define these broadly, so that the custodian does not have to make a series of fine distinctions to figure out whether a particular document needs to be preserved.
• The When. The custodians should know that their immediate compliance with the hold is expected. But the timing of things also comes into play in terms of the preservation obligation. Is this a dispute where you only need documents from months or years ago? Or is potentially relevant information continuing to be generated? It’s important to educate custodians to the nature of the obligation and how it might impact their decision-making when it comes to disposing of any information.
• The How. One of the frustrating parts of e-discovery is that sometimes well-intentioned custodians can end up altering the data that they are supposed to be preserving. Seemingly harmless steps, such as moving the information to a new location, for example, can alter the metadata of that document. In those cases where that kind of metadata is relevant, an adversary can assert a spoliation claim simply based on the effort made to meet its preservation obligations. The more cautious approach is to advise the custodians to preserve the data that they have “in place,” so that if necessary, you can engage more experienced technologists to extract the information in a way that won’t alter the metadata at all—that’s what people typically mean when they refer to a “forensically-sound collection.”
• The Why. The legal hold memo should also explain why preserving data is important. In addition to holding onto information that could help your case, preserving potentially relevant information avoids costly battles about spoliation, adverse inferences, monetary penalties, and, in the case of Government investigations, the possibility of an obstruction of justice charge.

Of course, no legal hold memo is perfect. They are, by necessity, issued early in the litigation lifecycle, when the landscape of the dispute may still be hazy and undefined. So when it comes to crafting the initial legal hold memo, don’t let perfect become the enemy of the good. The standard imposed by the discovery rules is one of reasonableness, not perfection.

Once you’ve sent the initial legal hold, remember your work is not necessarily done. As more about the dispute is discovered, or as the focus of the litigation shifts, the legal hold should be revised as necessary. Moreover, even when things don’t change, the best practice is to remind custodians about the preservation obligations periodically throughout litigation or an investigation, because the duty to preserve is an ongoing one.