I worked at an investment banking company in the 1990s. They did not have email when I started, but when they adopted Exchange and everyone got a Windows PC and MS Office, the CIO set a policy that emails would be retained for 6 months, then purged. I don't know if this would fly today, but I think the fact that it was a blanket policy and not based on the content of the messages made it OK at least at that time.
These days e-mail retention (as well as IM logs, recordings of calls etc.) in the financial world is based on rules set by bodies like the SEC and the FSA and runs to about seven years (at least that's the number I hear thrown about working in that world).
Still, if a law suit is brought against the company, you'd generally stop deleting anything until the lawyers give the ok.
I think the implication was that the policy was in place for when they weren't being sued, so that if they were sued, they could be completely reasonable in saying they only had 6 months worth of e-mails to provide for discovery.
