Legal hold vs retention policy: can you license data under a hold?

What is the difference between a legal hold and a retention policy?#

A retention policy is a company's standing schedule for how long each record type is kept and when it is deleted. A legal hold is a specific instruction to preserve records, overriding that schedule, because the company reasonably anticipates litigation, a government investigation or an audit. The policy is routine; the hold is triggered by events.

When the two conflict, the hold wins. Automatic deletion jobs, mailbox purges, helpdesk retention settings and system retirements must pause for covered records until counsel lifts the hold.

Can you license data that is under a hold?#

Licensing data under a hold is sometimes possible, because licensing usually works on prepared copies rather than originals, but it needs litigation counsel's explicit sign-off. A hold requires covered records to be preserved in their original form; it does not automatically forbid copying them for another legitimate purpose.

The risk lies in the process rather than the idea. Exports that alter metadata, preparation run on live systems instead of copies, or a migration that deletes the source after extraction can all damage preserved evidence. Counsel will also weigh whether licensing records related to the dispute could look like disclosure of evidence or put privilege at risk.

Which records should stay out regardless of hold status#

Some categories should stay out of a license whatever the hold status, because the risk falls on litigation strategy and third-party rights rather than on preservation alone. The table sets out common situations and the usual treatment.

The categories overlap in practice. A project manager's mailbox can hold privileged advice, documents produced by the other side and ordinary operating correspondence in the same folder, so exclusion usually happens at the custodian and date level first, then more finely if the rest is wanted.

Why held records past their retention date are awkward#

Records kept only because a hold suspended their deletion are awkward to license because the company's own policy says they should already be gone. They exist for one purpose, preserving evidence, and using them for another can conflict with retention commitments made to customers, employees and regulators.

When the hold lifts, the schedule resumes and those records are normally deleted. Some companies ask whether de-identified copies could be kept for licensing instead. That question turns on the same tests that apply to any record past retention: whether the de-identification holds, whether contracts or notices promised deletion, and whether counsel agrees. Decide it deliberately, not as a side effect of the hold.

How to license around an active hold#

Licensing around an active hold works when the hold and the license run as separate tracks with a shared checkpoint. The steps below keep preservation intact while the rest of the archive moves forward.

A buyer usually needs to know which records are excluded, not the details of the matter behind the exclusion. Describe exclusions by system, custodian and date range.

• 1Get the hold register from litigation counsel: matters, custodians, systems and date ranges.
• 2Remove covered custodians' mailboxes and matter folders for the covered dates from the first scope.
• 3Work only on exported copies; never run preparation or deletion on source systems under hold.
• 4Record a chain of custody for each export: who ran it, when, from which system and with what settings.
• 5Have litigation counsel sign off on the final scope before any sample or delivery.
• 6Pause any system retirement that would delete held originals after extraction.

Who decides what when a hold and a license overlap#

When a hold and a license overlap, litigation counsel decides what must be preserved, and the business decides what it wants to license from what remains. Keeping those roles separate avoids the most common failure: a licensing project quietly making preservation decisions.

In practice the general counsel or outside litigation counsel owns the hold register and approves scope, IT owns the exports and the chain of custody, and the executive sponsor of the license owns the commercial decision. If those three meet once before scoping and again before release, most conflicts surface while they are still cheap to fix.

Illustrative: a mechanical contractor with one disputed project#

Illustrative: a fictional mechanical contractor runs service and installation work in ServiceTitan, keeps project files in Procore and uses company email. A customer dispute over a large installation leads counsel to issue a hold covering that project's records and the mailboxes of the project manager, superintendent and estimator for the relevant period.

At the same time, the company is preparing to license years of service records: calls, estimates, work orders, technician notes and callbacks. Counsel and the COO agree that the disputed project and the covered mailboxes are out of scope entirely. Service records unrelated to the project are licensed from exported copies, with customer names and addresses removed.

A planned retirement of an old email archive is postponed until the hold lifts, because it contains covered messages. The license proceeds on the service records, and the exclusions are documented by system and date range without describing the dispute.

How SourceX handles records under a hold#

SourceX asks about holds, retention schedules and pending matters during the Rights step of the SourceX five-step transaction, and works only from exports the supplier provides, so preservation of originals stays with the supplier and its counsel.

The SourceX Evidence Packet records provenance and release authorization for each package, including the systems and date ranges covered, which helps counsel confirm that nothing under hold was included without approval.