Managing Retention Policies and Legal Holds in Microsoft Purview

Managing Retention Policies and Legal Holds in Microsoft Purview: A Practical Playbook for Law Firms

Client data is the lifeblood of legal practice—and a magnet for risk. Between evolving privacy laws, ethical duties, and rising cyber threats, firms must show they can retain, preserve, and defensibly dispose of information. Microsoft Purview provides the governance controls to do this at scale. This week’s guide breaks down how to configure retention policies and legal holds in Purview so your firm can meet regulatory obligations without slowing down modern, secure collaboration.

Table of Contents

Why Retention and Legal Holds Matter in Legal Practice

Retention and legal holds are the backbone of defensible information governance. They prove you keep what you must, delete what you should, and preserve anything potentially relevant to litigation or investigation. When implemented correctly in Microsoft Purview, these controls reduce discovery costs, minimize breach exposure, and demonstrate compliance with privacy and industry standards. The payoff is tangible: smaller data footprints, fewer review hours, clearer audit trails, and stronger client trust.

Regulatory Frameworks and Ethical Drivers

Law firms operate across a mosaic of client, industry, and jurisdictional requirements. Your retention and hold program must satisfy both external rules and internal ethics duties.

Framework / Rule Retention / Preservation Implication Relevant Microsoft Purview Controls
GDPR (EU) / UK GDPR Data minimization and storage limitation; delete when no longer needed; honor erasure subject to legal holds. Time-based retention labels; event-based retention; label-based disposition review; audit logs for defensibility.
CCPA/CPRA (California) Transparency and deletion rights; retain only necessary data; preserve when litigation is reasonably anticipated. Data Lifecycle Management with targeted scopes; hold release workflows; disposition reporting.
HIPAA (for PHI handled by firms) Safeguards + record retention requirements; secure preservation, limited access. Retention policies; sensitivity labels with encryption; role-based access; audit and alerting.
SEC/FINRA (financial services clients) Write-Once-Read-Many (WORM) style immutability; strict retention horizons and supervision. Preservation Lock for retention policies; regulatory record labels; immutable logging.
ABA Model Rules 1.1, 1.6 Competence in technology; duty of confidentiality and reasonable safeguards. Access controls; encryption; retention tuned to least data necessary; legal holds for defensibility.
Client Outside Counsel Guidelines (OCGs) Client-specific retention, hold protocols, and deletion timelines. File plans with label taxonomy; adaptive policy scopes; eDiscovery Premium hold communications.

“A lawyer should keep abreast of changes in the law and its practice, including the benefits and risks associated with relevant technology.” — ABA Model Rule 1.1 (Comment 8)

Microsoft Purview Essentials: Retention, Records, and Holds

Microsoft Purview unifies data governance across Microsoft 365. For legal teams, three capabilities matter most: Data Lifecycle Management (DLM), Records Management, and eDiscovery.

Key Concepts

  • Retention Policies: Apply broadly across locations (Exchange, SharePoint, OneDrive, Teams). You can retain for a period, then delete, or simply delete after a period.
  • Retention Labels: Applied per item or container (document, email, folder, SharePoint library). Labels can declare items as a record or regulatory record to enforce immutability and locking.
  • Event-Based Retention: Starts the clock from a specific event (e.g., matter closing, contract termination), not from the item’s last modified date.
  • Adaptive Policy Scopes: Dynamically target users/sites based on attributes (practice group, jurisdiction, client code) rather than static lists.
  • Preservation Lock: Makes a retention policy immutable—essential for WORM-style mandates (use with caution; it cannot be reversed).
  • Legal Hold: Preserves potentially relevant content in place. In Exchange, held content is in Recoverable Items; in SharePoint/OneDrive, preserved versions live in the Preservation Hold library, invisible to users.
  • Litigation Hold vs. eDiscovery Hold: A mailbox “Litigation Hold” is user-level and coarse. eDiscovery holds (Standard or Premium) are case-based, scoped by searches and custodians, and more defensible for litigation.

Implementing Retention Policies: A Step-by-Step Approach

A systematic rollout reduces risk and aligns controls with your firm’s matters and client requirements.

  1. Inventory and Map Obligations
    • Identify records types (matter files, client communications, engagement letters, HR, finance).
    • Map to retention horizons (e.g., 7 years for client files, 2 years for Teams chat unless held, immediate deletion for drafts after 90 days).
    • Capture client-specific OCGs that override defaults.
  2. Design Your File Plan
    • Create a taxonomy of retention labels: by practice area, client sensitivity, or jurisdiction.
    • Use “record” for standard immutability and “regulatory record” where stricter WORM behavior is needed.
    • Define disposition review workflows for high-value records (who approves deletion?).
  3. Choose Policy Types
    • Broad policies for default coverage (e.g., retain Exchange messages for 5 years across all mailboxes).
    • Location-specific policies for Teams chats/channels and high-risk SharePoint sites.
    • Label policies to publish labels to specific users, sites, or Teams.
    • Event-based labels for matter closing or client offboarding triggers.
  4. Leverage Adaptive Scopes
    • Target users by department = “Litigation,” country = “US,” or extension attributes (client/matter code).
    • Target SharePoint sites by site name patterns (e.g., “Client-1234-*”).
  5. Automate Labeling Where Possible
    • Auto-apply labels via keywords, Sensitive Information Types, or trainable classifiers (e.g., “Engagement Letter”).
    • Use default labels at the container level (site/library/folder) to reduce user burden.
  6. Enable Disposition Review
    • Route items nearing end-of-life to a review queue; require dual approval for regulatory records.
    • Export disposition reports for audit and client assurance.
  7. Test, Pilot, and Monitor
    • Pilot with one practice group; confirm impact on Teams chat, Outlook, and SharePoint versions.
    • Monitor the Preservation Hold library to verify retention behavior without user disruption.
  8. Consider Preservation Lock Where Required
    • Apply only after legal and compliance sign-off; cannot be turned off.

When litigation is reasonably anticipated, your holds must be swift, scoped, and auditable. Microsoft Purview eDiscovery (Standard) supports basic holds and exports; eDiscovery (Premium) adds custodian management, hold communications, review sets, and advanced analytics.

Core Workflow

  1. Open a Case in eDiscovery (Premium) and define matter metadata (court, practice, client code).
  2. Identify Custodians and Data Sources
    • Add user mailboxes, OneDrive, Teams (chats, channels, private channels), SharePoint sites, Viva Engage communities.
    • Include shared mailboxes and guest user content where relevant.
  3. Apply Holds
    • Use queries to narrow scope (date ranges, keywords, participants).
    • Remember: Multiple holds and retention policies can coexist; the most restrictive preservation wins.
  4. Notify Custodians (Premium)
    • Send hold notices with acknowledgment tracking and reminders.
    • Log escalations and exceptions for defensibility.
  5. Collect and Review
    • Run searches; load results to Review Sets; deduplicate and use analytics to reduce volume.
    • Tag, batch, and export with chain-of-custody reports.
  6. Release Holds and Dispose
    • When the matter ends, release holds. Retention policies resume control; items can delete when eligible.
    • Document the decision and retain audit artifacts.

Tip: For mailboxes, consider avoiding the older “Litigation Hold” toggle in favor of case-based holds in eDiscovery for better scope control and reporting.

Identity and Access Controls for eDiscovery and Records

Least privilege is essential: only the right people should be able to place holds, see protected data, or change retention.

  • Role-Based Access: Use Purview roles such as Records Management, eDiscovery Manager/Administrator, Compliance Administrator. Avoid global roles for routine work.
  • Privileged Access Management: Require just-in-time elevation for actions like creating holds, changing retention, or enabling Preservation Lock.
  • MFA and Conditional Access: Enforce MFA and device compliance for admin and reviewer roles.
  • Separation of Duties: Split hold authorization, content review, and export across different individuals or teams.
  • Auditing: Enable Unified Audit Log and alerting on hold changes, label changes, and large exports.

How Retention, DLP, and Encryption Work Together

Retention governs lifecycle; DLP prevents inappropriate sharing; sensitivity labels encrypt data. Together they create a layered defense.

  • Retention vs Deletion: Retention policies can keep content even if users delete it. After the retention period, content can be deleted automatically or sent to disposition review.
  • DLP Policies: Prevent exfiltration (e.g., client SSNs or PHI leaving the tenant). Use DLP with context-aware rules for Teams, Exchange, SharePoint, and endpoints.
  • Sensitivity Labels: Encrypt matter-critical content; define external access restrictions. Ensure eDiscovery workflows can decrypt labeled items for authorized reviewers.
  • Records and Edits: Record labels restrict editing; regulatory records enforce stricter immutability.

Common Pitfalls and Mitigations

Risk / Pitfall Impact Mitigation in Microsoft Purview
Over-retention increases breach scope and discovery costs Excess data to review; higher exposure if compromised Right-size retention horizons; auto-apply labels; enable disposition review to defensibly delete
Holds not applied to all sources (Teams private channels, shared mailboxes) Spoliation risk; sanctions Use eDiscovery (Premium) custodian and non-custodial holds; include all relevant locations
Admins can bypass or remove retention Compliance failure; WORM violations Preservation Lock; regulatory record labels; privileged access with approvals and auditing
Confusion between mailbox “Litigation Hold” and case holds Inconsistent scope; weak reporting Standardize on case-based holds; document policy and train IT/legal
Encryption blocks review Delays and gaps in discovery Use Microsoft sensitivity labels; ensure eDiscovery reviewers have decryption rights; avoid third-party encryption that breaks indexing
Poor custodian notifications Employees delete or alter data; weak defensibility Hold communications with acknowledgment tracking; reminders and escalations
No plan for DSARs or deletion requests Regulatory noncompliance; client dissatisfaction Honor deletion unless on hold; document exceptions; use disposition reports and audit trails

Mandatory Best Practices for Attorneys and Legal Ops

  • Adopt a tiered retention schedule aligned to practice areas and client OCGs; review annually.
  • Use adaptive scopes so new matters and users are automatically covered by the right policies.
  • Standardize on case-based eDiscovery holds with acknowledgement workflows and auditable notices.
  • Enable Preservation Lock only where required; document governance and break-glass procedures.
  • Apply default retention labels at SharePoint libraries and Teams to reduce user error.
  • Configure MFA, Conditional Access, and role segregation for all compliance administrators and reviewers.
  • Use disposition review for records termination; export reports for client audits.
  • Integrate DLP and sensitivity labels with retention to ensure protected sharing without hindering discovery.
  • Train attorneys and staff quarterly on holds, retention behavior, and secure collaboration in Teams/SharePoint.
  • Test holds and retention in a pilot tenant or sandbox before enterprise rollouts.

AI, Automation, and Future Trends

AI and automation are raising the bar for defensible governance. Microsoft Purview’s trainable classifiers help auto-label complex documents (e.g., pleadings, engagement letters), while adaptive scopes adjust coverage as teams and matters change. As firms adopt Microsoft Copilot and other AI tools, governance must extend to prompts, chat outputs, and generated files—ensuring these artifacts are retained, discoverable, and subject to holds when necessary. Expect tighter integration between AI-assisted classification, retention, and eDiscovery analytics.

Figure: Lifecycle and Layered Controls for Defensible Retention

  1. Ingestion: Emails, documents, Teams chats are created or uploaded.
  2. Classification: Auto-label via keywords, Sensitive Information Types, classifiers; default labels at libraries.
  3. Protection: Sensitivity labels encrypt; DLP prevents oversharing.
  4. Retention: Policies/labels retain or delete on schedule; regulatory records enforce immutability.
  5. Legal Hold: Case-based holds preserve in place across all relevant locations.
  6. Review & Export: eDiscovery searches, review sets, analytics, and audited exports.
  7. Disposition: Workflow approvals; defensible deletion; reports archived.
  8. Audit & Oversight: Unified audit, alerts, and periodic program reviews.
A layered risk management model linking classification, protection, retention, legal holds, and disposition to create a defensible lifecycle.

Conclusion

Managing retention policies and legal holds in Microsoft Purview is central to compliance, security, and privacy in modern legal practice. With clear schedules, case-based holds, adaptive scopes, and strong access controls, firms can minimize data risk, contain discovery costs, and meet regulatory expectations. Most importantly, a defensible lifecycle—retain what is required, preserve what is relevant, and delete what is unnecessary—strengthens client trust and your firm’s operational resilience.

Want expert guidance on compliance, security, and privacy in legal technology? Reach out to A.I. Solutions today for tailored solutions that protect your firm and your clients.

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