Legal Hold Cost Calculator

About the Legal Hold Cost Calculator

A legal hold requires potentially relevant data to be preserved once litigation is reasonably anticipated. This page estimates the cost of that hold using a simple model for storage, custodian review time, and platform licensing.

It is a budgeting worksheet, not a compliance verdict. Real legal-hold cost can also depend on collections, forensic imaging, outside vendors, remote device preservation, remediation work, and how long the hold remains active.

When This Page Helps

Legal-hold cost is easy to underestimate because the storage line item looks small while review time and platform duration keep compounding. This worksheet helps teams compare preservation scenarios and understand how long-running holds can affect case budget.

How to Use the Inputs

1. Enter the total data volume to be preserved (in GB).
2. Enter the storage cost per GB per month.
3. Enter the number of custodians (employees whose data is preserved).
4. Enter the estimated review hours per custodian and the review rate.
5. Enter monthly platform licensing costs.
6. Enter the expected duration of the hold in months.

Example Calculation

Tips & Best Practices

• Identify all custodians early to avoid expanding the hold later at greater cost.
• Use technology-assisted review (TAR) to reduce document review costs by 50–70%.
• Negotiate volume-based pricing with e-discovery vendors for large data sets.
• Implement data retention policies to reduce the volume of data subject to legal holds.
• Regularly review active legal holds and release them when litigation concludes.
• Consider cloud-based e-discovery platforms for cost-effective scalability.

Components of Legal Hold Costs

Legal hold costs include data identification, collection, processing, storage, review, and production. Each phase has its own cost drivers and optimization opportunities. Early case assessment tools can reduce downstream costs.

Technology-Assisted Review

TAR uses machine learning to prioritize documents for review, reducing the volume that human reviewers must examine. Studies show TAR can reduce review costs by 50–70% while maintaining or improving accuracy compared to linear review.

Proactive Cost Management

Organizations can reduce legal hold costs by implementing data governance policies, reducing redundant data, training employees on document management, and using in-house e-discovery tools for routine matters.

Frequently Asked Questions

• What is a legal hold?

  A legal hold is a directive to preserve all documents, electronic data, and records that may be relevant to pending or anticipated litigation. It overrides normal data retention and destruction policies.

• How long does a legal hold last?

  A legal hold lasts until the litigation is fully resolved, including appeals. Complex cases can keep holds active for 3–5 years or more. The duration directly impacts storage and platform costs.

• What is a custodian in e-discovery?

  A custodian is a person whose data or documents are subject to the legal hold. This typically includes employees with relevant knowledge, communications, or documents related to the litigation.

• What happens if a legal hold is not properly implemented?

  Failure to preserve evidence can result in spoliation sanctions, adverse inference instructions (the court tells the jury to assume the destroyed evidence was harmful), monetary penalties, or case dismissal. Use this calculator to model different scenarios and find the best approach.

• What is the biggest cost driver in legal holds?

  Document review is typically the most expensive component, accounting for 60–80% of total e-discovery costs. Technology-assisted review and early case assessment can dramatically reduce this expense.

• Can legal hold costs be recovered?

  In some cases, the prevailing party can recover e-discovery costs as part of a cost award. However, this varies by jurisdiction and is not guaranteed. Budget conservatively.