In today's modern economy, corporations are faced with many challenging new issues, not the least of which is minding their bits and bytes. Most of us, if not all, by now, have been confronted with a litigation hold and the challenges they can generate. But in case you are just awakening from a Rip Van Winkle-like nap, a litigation hold is a written notice advising corporations and custodians of electronically stored information (ESI) to preserve potentially relevant records and information that pertain to pending or anticipated litigation.

So with that refresher, the important question is: How do you cost effectively respond to a litigation hold? After all, litigation, especially electronic discovery in hotly contested litigation, can become quite expensive. As in-house counsel, you are responsible to effectively manage these costs and the company's exposure. Below are a few tips to help you in this regard and at the same time assist in preserving the company's bottom line:

1. Be Prompt.The duty to preserve information immediately arises upon receipt of a complaint or notice of a lawsuit, receipt of a subpoena as a third-party to an existing lawsuit, receipt of a formal order of investigation from a regulatory body, or knowledge of a potential claim. Failure to timely institute and maintain a litigation hold can have serious consequences, including monetary penalties, adverse jury instructions, preclusion of evidence, and in the worst cases, default judgment or dismissal. Pension Committee of the Univ. of Montreal Pension Plan v. Banc of America Securities. In other words, the worst thing—and potentially most costly thing—you can do is delay.