How to set up litigation hold in Microsoft 365?

Implementing litigation hold effectively is a critical component of compliance and data governance in modern organizations.

For Microsoft 365 environments, knowing how to set up litigation hold ensures that your organization can preserve critical data during legal investigations, audits, or eDiscovery requests.

This guide provides step-by-step instructions, best practices, and key considerations to help Microsoft 365 admins, legal teams, and compliance managers maintain data integrity and mitigate legal risks.

In this article, we’ll explore the tools and functionalities available in Microsoft 365 for litigation hold, including mailbox preservation, retention policies, eDiscovery, and archiving workflows. We’ll also discuss how to avoid common pitfalls and leverage automation to streamline compliance management.

What is Litigation Hold in Microsoft 365?

Litigation hold in Microsoft 365, also known as legal hold or office 365 litigation hold, is a mechanism that prevents the deletion or modification of mailbox content for users who are subject to a legal investigation or compliance requirement. Once enabled, all email messages, calendar items, and other mailbox content are preserved in the recoverable items folder, even if end-users attempt to delete them.

This functionality ensures that organizations can comply with legal obligations, protect sensitive data, and maintain the integrity of electronically stored information (ESI) for audits, lawsuits, or regulatory reviews.

Key features include:

• Preservation of original versions of emails, calendar entries, and Teams messages.
• Integration with Microsoft Purview eDiscovery for legal case management.
• Retention of content from user mailboxes, archive mailboxes, and SharePoint Online or OneDrive for Business accounts.

By knowing how to set up litigation hold, IT administrators can ensure that no critical data is lost or inadvertently deleted, reducing legal risks and supporting compliance frameworks such as ISO, NIST, GDPR, or industry-specific regulations.

Why Set Up Litigation Hold in Microsoft 365?

Organizations implement litigation hold for several reasons:

1. Compliance Requirements: Many industries, including finance, healthcare, and legal services, have strict regulations requiring data preservation.
2. Legal Proceedings: During lawsuits or investigations, organizations must retain ESI to prevent data loss.
3. Data Governance: Ensures that sensitive emails and files are securely retained, even after deletion by end-users.
4. Audit Readiness: Simplifies audits by maintaining complete mailbox content history.

Microsoft 365 provides robust tools to enable office 365 litigation hold across your organization while integrating with compliance management and eDiscovery tools.

Step-by-Step Guide to Set Up Litigation Hold

Setting up litigation hold in Microsoft 365 involves using either the Microsoft 365 admin center, Exchange Online PowerShell, or the Microsoft Purview Compliance Center. Below is a step-by-step approach.

1. Prepare for Litigation Hold

Before enabling litigation hold, gather essential information:

• Identify the custodians whose mailboxes require preservation.
• Determine the scope of data, including emails, Teams messages, and documents stored in SharePoint Online or OneDrive for Business.
• Define the retention period or duration of the hold.
• Review your organization’s compliance policies and retention schedules.

Proper planning ensures that the litigation hold aligns with legal requirements and avoids unnecessary disruption to end-users.

2. Enable Litigation Hold via Microsoft 365 Admin Center

To enable litigation hold using the Microsoft 365 admin center:

1. Sign in as a global admin or compliance officer.
2. Navigate to Exchange Admin Center (EAC) → Recipients → Mailboxes.
3. Select the user mailbox that requires litigation hold.
4. In the mailbox properties, go to the Mailbox Features tab.
5. Enable Litigation Hold and set the duration (optional).
6. Save changes.

Once enabled, the mailbox is preserved automatically. Emails and other items cannot be permanently deleted by the user, and deleted items move to the recoverable items folder.

3. Enable Litigation Hold via PowerShell

For organizations managing multiple users, Exchange Online PowerShell allows bulk litigation hold setup:

Set-Mailbox -Identity "user@contoso.com" -LitigationHoldEnabled $true -RetentionComment "Litigation hold for legal case" -RetentionUrl "https://contoso.com/hold"

Key benefits of using PowerShell:

• Automate bulk litigation hold for multiple active users.
• Customize RetentionComment and RetentionUrl for auditing.
• Monitor litigationholdduration and mailbox status efficiently.

4. Integrate with eDiscovery Cases

Microsoft 365’s Microsoft Purview eDiscovery solution allows legal teams to create ediscovery cases tied to litigation hold:

1. Navigate to the Compliance Center → eDiscovery → Core eDiscovery.
2. Create a new case and assign custodians.
3. Apply the litigation hold to preserve all mailbox content for the case.
4. Use content search and ediscovery tools to collect relevant mailbox items, including emails, Teams conversations, and documents.

Integration ensures all preserved data is easily accessible for legal review while maintaining a clear audit trail.

5. Monitor Litigation Hold Status

After enabling litigation hold, monitoring is crucial:

• Use the Microsoft 365 admin center or Exchange Online PowerShell to check litigationholdenabled status.
• Verify that mailbox content is moving correctly to the recoverable items folder.
• Ensure that retention policies do not conflict with the litigation hold.

Monitoring ensures compliance and minimizes the risk of accidental deletion or data loss.

6. Manage Deleted Items and Archiving

With litigation hold active:

• Deleted mailbox items are preserved automatically.
• Archive mailboxes should be configured to accommodate large volumes of retained data.
• Review deleted items and in-place holds to ensure all required content is preserved.

Enabling proper archiving and storage management prevents mailbox size issues and supports long-term retention.

7. Configure Notifications and Hold Notices

Communicate with custodians:

• Enable hold notifications to inform users about the litigation hold.
• Provide guidance on email retention, acceptable use, and legal obligations.
• Use hold page or notification settings in Microsoft Purview to ensure users understand the preservation requirements.

Clear communication reduces accidental deletion or confusion among active users.

8. Avoid Common Pitfalls

Some common pitfalls when setting up litigation hold include:

• Forgetting to apply hold to Teams conversations and SharePoint Online.
• Overlapping retention policies that could override hold settings.
• Misconfigured permissions, preventing legal teams from accessing required mailbox content.
• Neglecting to archive mailbox or monitor storage usage.

Following best practices avoids these challenges and ensures litigation hold functions as intended.

9. Align Litigation Hold with Broader Compliance Strategy

A litigation hold should not exist in isolation. Align it with your broader compliance management framework:

• Integrate with retention policies and data retention schedules.
• Apply to both cloud-based and on-premises workloads.
• Ensure alignment with industry regulations (ISO, NIST, GDPR).
• Document processes to support internal audits and legal proceedings.

A cohesive strategy ensures your organization remains compliant and audit-ready.

10. Leverage Automation

Automation can streamline litigation hold management:

• Use PowerShell scripts to apply holds across multiple user mailboxes.
• Integrate with workflow tools to notify custodians automatically.
• Set up scheduled monitoring to verify litigationholdenabled status.

Automation reduces administrative overhead and helps maintain consistent compliance across your Microsoft 365 environment.

Benefits of Properly Setting Up Litigation Hold

By knowing how to set up litigation hold, organizations gain several benefits:

1. Regulatory Compliance: Preserves mailbox content to meet legal and industry requirements.
2. Data Integrity: Ensures emails and documents remain unaltered and recoverable.
3. Simplified eDiscovery: Streamlines content search and ediscovery tools usage.
4. Audit Readiness: Provides a clear record of preserved mailbox items.
5. Risk Mitigation: Reduces potential penalties from accidental deletion or regulatory violations.

Best Practices Recap

1. Plan custodians and scope carefully before enabling litigation hold.
2. Enable hold through Microsoft 365 admin center or PowerShell.
3. Integrate with Microsoft Purview eDiscovery for legal case management.
4. Monitor mailbox content regularly, including deleted items and archive mailboxes.
5. Configure notifications and hold notices for end-users.
6. Avoid overlapping retention policies or conflicting permissions.
7. Document processes and align with broader compliance management strategies.
8. Automate repetitive tasks using PowerShell and workflows.
9. Include Teams, SharePoint Online, and OneDrive accounts in litigation hold scope.

Conclusion

Setting up litigation hold in Microsoft 365 is essential for maintaining compliance, preserving critical data, and supporting legal and audit requirements. By following best practices, integrating with eDiscovery, and leveraging automation, IT administrators and legal teams can ensure data integrity and streamline compliance management.

Microsoft 365 provides flexible tools to protect mailbox content, Teams conversations, and SharePoint documents while supporting long-term retention and archiving strategies. With proper planning and execution, organizations can reduce risks associated with data deletion and ensure that critical information remains available when needed.

To simplify the process and ensure effective management of litigation hold in your Microsoft 365 environment, partner with experts who can provide guidance.