Slash Risk by Saying Goodbye to Manual Legal Holds

by Zapproved LLC
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The right automation software can help you avoid spoliation sanctions, improve your audit trails, and boost ROI

We all know that ediscovery can be expensive. But while we usually think of review as the most expensive stage, the riskiest and often most costly stage is preservation. Why? Because relevant information that you fail to preserve simply can’t be replaced later. You can always iterate through additional rounds of review or processing if needed, but spoliated evidence is lost forever, and the attendant sanctions can dramatically outstrip the value of a case.

So why are you still using a manual legal hold process? If your answer is cost, it’s time to rethink that. We’ve crunched the numbers and found a remarkable financial savings — over a 300% return on investment (ROI) — among companies that have upgraded from a manual legal hold process to current best-in-class software. And that’s just the financial return.

In reality, the risk-mitigation benefits of automated software are twofold. Not only does automated legal hold software reduce your actual risk of spoliation, it also improves the defensibility of your preservation process. In other words, you’ll be less likely to be hit with eventual sanctions, less likely to be accused of spoliation, and more able to respond to an allegation of lost evidence if it should occur — all of which can greatly reduce stress among your legal team and your custodians.

Painful Consequences of Data Spoliation

The fines and sanctions for spoliation of evidence can be substantial. Typically, these costs are in the range of tens or hundreds of thousands of dollars. One company we interviewed reported that it had been slapped with a six-figure fine for allowing evidence to be lost through its old manual hold process. In a recent court opinion, the Second Circuit upheld a $2.7-million fee award for spoliated evidence in a case that was only valued at around $20,000!

Beyond fines and costs, spoliation can even decide cases. If the court determines that lost evidence would have hurt your claim, it could order summary judgment for your opponent. In short, a single instance of spoliation sanctions could offset the entire cost for automated, cloud-based legal hold software — software that would have made issuing and managing your legal holds simple, quick, and straightforward.

How Manual Legal Holds Increase Risk

What is it that makes a manual legal hold process so inferior? Using a manual process to manage legal holds and track custodian compliance causes two major disadvantages when it comes to spoliation.

First, a manual process increases the risk that evidence will be lost. Manual holds take longer to issue after a trigger event, during which time key data could be inadvertently lost or destroyed. Automated software that allows legal to issue a hold using a predrafted template can reduce the time needed to issue a hold by 70% or more.

Manual processes are also more prone to errors that can cause data loss. Critical custodians or data sources can easily slip through the cracks as the legal department tries to shuffle emails and spreadsheets. Tracking custodian compliance rates is more difficult as well, leading to lower overall compliance. We found that custodian compliance rates ranged from 55 to 80% under a manual process but improved to 95% or even perfect 100% compliance with an automated process.

Second, using a manual process to manage legal holds and track custodian compliance makes it harder to defend your preservation. With a manual process, it may be difficult or even impossible to create a complete and defensible audit trail of your preservation activities if you are accused of spoliating evidence.

One customer we interviewed noted that it could take one or two full-time employees a week or longer to complete an audit trail using their old manual system. Best-in-class legal hold software, on the other hand, can automatically create a comprehensive audit trail describing all of your preservation activity in just moments. Overall, we found a 75% or greater reduction in the time needed to defend preservation practices — not to mention dramatically lower stress levels!

Leverage Automated Legal Hold Software to Elevate Your Data Preservation Strategy — and Lower Risk

A consistent, defensible preservation strategy is about more than just issuing legal hold notices to custodians. That’s why automated legal hold software does much more than initial notifications.

The most effective legal teams routinely follow up with nonresponsive custodians, escalating communications as needed. Those check-ins ensure that custodians understand their responsibilities and acknowledge their compliance with the terms of the hold. But manual follow-up is time-consuming and all too often nonexistent.

Legal hold software can follow up with custodians automatically, on a predetermined schedule customized to each custodian’s experience and sophistication with ediscovery. These communications can escalate on a preset pattern as well, referring nonresponsive custodians to their supervisors for intervention and resolution. This saves everyone time while vastly reducing the risk of spoliation.

Automated software will also send periodic hold reminders to custodians, reminding them of their ongoing data-preservation obligations, which is especially helpful for custodians who may be subject to multiple concurrent holds. Rather than an increasing risk of spoliation over time, this automated process is effortless and takes almost no time on the part of the legal department or individual custodians.

Legal hold software can go even further, if needed. It can be used to apply preservation holds to email accounts and other data sources to physically prevent data from being deleted or to trigger data collection for especially important or sensitive data. We found that manually applying a preservation hold to an email account or cloud data repository takes about 30 minutes — but with automated and integrated preservation software it takes only seconds. Automation also reduces the time required to trigger, track, and report on collections requests by 80% or more.

The bottom line is that the financial impact of preventing even one spoliation sanction or adverse ruling can far outweigh the cost of investing in an automated legal hold and preservation solution.

To calculate the estimated ROI for your organization, request a complimentary analysis today. We’re confident the results will be worth it.

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Zapproved LLC
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