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What is the difference between M365 retention policy and legal hold?

Retention = 'keep this for X years, then it may go'. Hold = 'keep this and nobody may delete it'. Two different goals, people mix them up.

Try this first

  1. 1Retention policy: set for general compliance (e.g. keep invoicing mail for 7 years). Works on groups of mailboxes, with an expiry.
  2. 2Litigation hold (or in-place hold): set when there is a legal matter. Freezes that one mailbox; everything is kept, even if the user tries to delete.
  3. 3Neither replaces a backup. Microsoft says so themselves: hold protects against tampering, not against tenant failure or ransomware on the account.
  4. 4Before lifting a hold, confirm the matter is truly closed and your legal team agrees. That is not an IT-only decision.

When to bring us in

Setting up or removing a hold sounds simple but has legal consequences. We only do this after written instruction from your legal contact. Do not call to 'just put everything on hold' without context.

See also

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