Retention Robots: Automatic Legal Holds Becoming the Norm for Corporate Legal

A Zapproved survey found that in the face of sanctions and a growing volume of disparate corporate data, many companies are turning to technology to help manage legal holds.

While they are a prime responsibility for attorneys facing litigation or regulatory investigations, legal holds are not always executed as effectively as they should be. For many, it is a problem of managing data in multiple locations; for others, it's the challenge of having unreliable data custodians.

But many attorneys are betting that these problems can be mitigated through the use of automated technology, according to Zapproved's 2017 Legal Hold and Data Preservation Benchmark Report, a survey of legal, compliance, IT and corporate staff from more than 50 U.S. corporations.

The survey found that in 2017, over half—57 percent—of corporations are using automated software for legal holds, marking the first time in the survey's history that a majority of respondents are employing automated legal holds. From 2014 to 2016, the percentage using this technology hovered around 46 percent, while in 2013, it was at 34 percent.

Still, some 37 percent, a sizable minority of those surveyed, rely on manual legal hold processes, with 58 percent of those respondents expressing confidence in the defensibility of their manual process. Among those using automated legal holds, however, confidence in the automated procedures was higher at 79 percent. 

Brad Harris, vice president of products at Zapproved, explained that corporate teams are more confident using automated legal holds because it allows for more uniform and defined processes. With automated legal holds, he said, "you are more likely to have repeatable processes, and you're much more likely to have best practices as part of [those processes], practices like ongoing reminders tracking acknowledgments, or following up on those who don't acknowledge."

The survey found that 84 percent of those using automated legal holds sent periodic reminders to their custodians, while 56 percent of those using manual legal hold processes did the same. Among those sending out release notification once a matter is resolved, the number skewed 75 percent to 58 percent in favor of automated legal hold users.

Harris noted that effective legal holds are needed given the repercussions of not properly retaining data for litigation or regulatory investigations. Under the 2015 amendments to the Federal Rules of Civil Procedure (FRCP), for example, parties can now be sanctioned for discoverable data spoliation or loss.

The move toward automated legal holds may also be occurring because the technology has become less expensive to deploy. Since most automated legal hold platforms can be hosted on the cloud, "you don't have to install, maintain, test, or upgrade all of those investments that you used to have to do on premise," Harris said.

Alongside the increased use of automated legal holds, the survey found that many corporate legal departments have stopped training their employees on legal processes altogether. A narrow majority of 52 percent said they trained their employees in 2017, down from 69 percent in 2016, and 74 percent in 2015.

Harris noted that companies may be reining in training because they have done enough in past years and "don't have to do as much now." He also pointed out that as automated software makes it easier to remind data custodians to create and manage legal holds, they might not need as much training as before.

Contact Rhys Dipshan at rdipshan@alm.com. On Twitter: @R_Dipshan.

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Rhys Dipshan

Rhys Dipshan is a journalist who covers in-house tech issues from early disruption to ghosts in the machine for Legal Tech News, The National Law...

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