Legal Hold for Small Matters: Everything You Need to Know

19 June 2025 by Carey eDiscovery legal-hold small-cases
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Takeaway: Legal holds aren’t just for multi-million-dollar lawsuits. Even a modest contract dispute can trigger a duty to preserve potentially relevant emails, chat threads, and cloud-stored files. For small teams, the margin for error is slim: lose key evidence and the case can collapse before it starts. This guide strips away the jargon and walks you through the essentials—when preservation kicks in, how to notify custodians, and a streamlined process you can manage with limited resources—so you stay compliant without breaking the bank.

A legal hold (also called a litigation hold) is an organization’s formal instruction to preserve all documents, emails, chat messages, cloud files, and even voicemails that are potentially relevant to a dispute. Think of it as pressing the “do not overwrite” button on evidence.

For small cases, the core principle is identical, but the scale is different:

  • Fewer custodians
  • Limited data sources
  • Tighter budgets and bandwidth

Yet courts hold a five-employee firm to the same preservation standard as a mega-corp. Cutting corners is not an option.

The legal hold clock starts ticking when an organization reasonably anticipates that it may need relevant information for an investigation, audit, or litigation. That phrase haunts lawyers because it’s fact-specific, but here are common small-case triggers:

Trigger Example
Demand letter A contractor emails threatening to sue over unpaid invoices.
Internal discovery of wrongdoing You uncover potential copyright misuse in a side project.
Regulatory inquiry A local labor board asks for payroll records.
Filing of a small-claims complaint You receive notice of a claim in the county court.

Tip: If you’re asking yourself whether preservation is required, preservation is almost always needed. Treat that moment as Day 1 of your data preservation legal hold.

  1. Sanction exposure: Judges rarely distinguish between “mom-and-pop” and “multinational” when evidence is destroyed.
  2. Settlement leverage: Demonstrating airtight preservation often encourages the other side to pursue an early resolution.
  3. Cost control: The sooner you preserve, the less you’ll spend later trying to reconstruct deleted data during eDiscovery legal hold review.

Below is a streamlined workflow that you can adapt without involving a legion of outside counsel.

  1. Identify custodians: List everyone likely to possess relevant information. In small matters, this may be just two or three people.
  2. Map data sources: Inventory where data lives: email, Slack, OneDrive, phones, accounting apps. Include backups.
  3. Draft and issue the legal hold notice: Use plain language when drafting the legal hold notice. Something along the lines of the example given below:
    “Please do not delete or alter any emails, chats, or files related to Project Phoenix sales negotiations between January 1st, 2021, and May 31st, 2021. Place any paper documents in the red ‘Hold’ folder.”
    Send via email with read receipt or track acknowledgement manually with a required reply so that you can track the receipt of the notice.
  4. Collect initial data (Week 1): Export mailbox PSTs or Google MBOX, pull Slack ZIPs, and determine whether targeted imaging or file collection is necessary. Early collection secures evidence before auto-purge cycles kick in.
  5. Suspend deletion policies (Week 1): Pause 30-day auto-delete in Slack, extend email retention labels, and turn off drive sanitization on devices subject to the hold.
  6. Monitor compliance (ongoing): Utilize low-cost tools (many cloud suites have built-in audit logs) to confirm that nothing is deleted and conduct periodic custodian follow-ups to verify compliance.
  7. Periodically refresh the notice: If the case expands or custodians leave the company, reissue an updated small case legal hold notice.
  8. Release the hold promptly: On resolution of the matter, confirm with legal counsel that no other legal or regulatory obligations apply before releasing the hold. Once you receive confirmation, send a clear release so that regular retention schedules can resume, thereby reducing storage costs.

Challenges small teams face

Challenge Why It Hurts Quick Fix
Limited IT resources No dedicated eDiscovery admin to run exports. Choose a platform with one-click collections and guided workflows.
BYOD devices Personal phones mix business and private data. Secure a written consent policy to retrieve data from all devices.
Shadow SaaS apps Freelancers may use Canva, Notion, or their personal Dropbox account. Add “Where else do you save work files?” to the custodian interview script.
Costs of third-party vendors Traditional vendors can be expensive. Opt for a cloud-based eDiscovery tool that allows you the flexibility to grow or decrease your case data easily and has pro-rata pricing.

Best practices and pro tips for a bulletproof small-matter hold

  1. Template everything: Keep a “legal hold notice in small cases” template ready so you can act in hours, not days. Sample template given below.
  2. Educate early: A 15-minute “what is a legal hold?” lunch-and-learn saves hours of panic later.
  3. Centralize communications: Reply-all threads create gaps in evidence. Route all hold questions through one email alias.
  4. Use tags: Tag preserved folders with the format “LEGAL-HOLD-PROJECT-NAME” so IT can quickly report on listings.
  5. Document every action: A simple spreadsheet that logs custodian acknowledgments and collection dates is invaluable if the judge asks.
  6. Leverage eDiscovery tools: Modern eDiscovery platforms (yes, ours included) let you preserve data and keep track of operations performed on the data.
  7. Keep it narrow: Over-broad holds balloon storage costs. Tie date ranges and keywords directly to claims.
  8. Schedule quarterly reviews: Small disputes can linger. Reconfirm that the scope is still accurate and all custodians remain employed.

Identify, Notify, Collect, Monitor, and Release are the steps in the legal hold process. Having a checklist of tasks to complete keeps you on track and ensures compliance. Print this suggested checklist to help you stay organized:

☐ Litigation reasonably anticipated
☐ Custodians listed
☐ Data sources mapped
☐ Hold notice issued (read-receipt captured)
☐ Auto-delete paused
☐ Core data collected
☐ Compliance audited weekly
☐ Notice refreshed on case changes
☐ Hold released and documented

Subject: Legal Hold Notice – <Case Name>
Body:

  1. Do not delete, modify, or overwrite any documents, emails, chats, or files related to <Case topic and date range>.
  2. Forward all future communications about this topic to <email address>.
  3. Confirm receipt by replying “ACKNOWLEDGED” within 24 hours.

Attach an FAQ sheet explaining why preservation is required and who to contact with questions. Clear, concise, and defensible.

It protects small businesses from discovery disasters, keeps disputes proportional, and signals to judges and opponents that you play by the rules. If you’re juggling multiple apps, limited IT help, and tight deadlines, consider an eDiscovery platform like GoldFynch to help with the data preservation for your legal hold. Preserve smart. Litigate confidently.

It’s an easy-to-use cloud-based eDiscovery application that’s perfect for small matters. GoldFynch also allows you to scale up or down with minimal hassle. You can sign up for free without even using a credit card.

  • It costs just $27 a month for a 3GB case: That’s significantly less than most comparable software. With GoldFynch, you know what you’re paying for exactly – its pricing is simple and readily available on the website.
  • It’s easy to budget for. GoldFynch charges only for storage (processing is free). So, choose from a range of plans (3 GB to 150+ GB) and know upfront how much you’ll be paying. It takes just a few clicks to move from one plan to another, and billing is prorated, so you’ll pay only for the time you spend on any given plan. With legacy software, pricing is much less predictable.
  • It’s simple to use. Many eDiscovery applications take hours to master. GoldFynch takes minutes. It handles a lot of complex processing in the background, but what you see is minimal and intuitive. Just drag-and-drop your files into GoldFynch and you’re good to go. Plus, it’s designed, developed, and run by the same team. So you get prompt and reliable tech support.
  • It keeps you flexible. To build a defensible case, you need to be able to add and delete files freely. Many applications charge to process each file you upload, so you’ll be reluctant to let your case organically shrink and grow. And this stifles you. With GoldFynch, you get unlimited processing for free. So, on a 3 GB plan, you could add and delete 5 GB of data at no extra cost, as long as there’s only 3GB in your case at any point. And if you do cross 3GB, your plan upgrades automatically, and you’ll be charged for only the time spent on each plan. That’s the beauty of prorated pricing.
  • Access it from anywhere. And 24/7. All your files are backed up and secure in the Cloud.

Want to learn more about GoldFynch?

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