Linklaters

Financial institutions faced a mounting regulatory crisis as initial margin (IM) requirements under new margin rules were set to come into scope in September 2020, forcing hundreds of firms to negotiate complex ISDA documentation at scale within a compressed timeframe. The core obstacle was structural: legal data existed almost entirely in unstructured formats — PDFs and Word documents — making it impossible to analyze, reuse, or audit systematically. Extraction technology was available but remained too experimental and error-prone to be trusted for compliance-grade work. The result was a sector-wide bottleneck where each negotiation produced yet more unstructured data, compounding the problem rather than solving it.

Linklaters' technology arm Nakhoda partnered with the International Swaps and Derivatives Association (ISDA) to build ISDA Create – IM, an online platform for electronically negotiating initial margin documentation. Rather than attempting to extract structured data from existing documents — an approach Nakhoda assessed as insufficiently mature — the platform approached the problem upstream. ISDA documentation was deconstructed into a defined set of permutations; counterparties select their positions interactively, and those choices simultaneously generate the executed document and a structured, auditable data record. Linklaters, acting as ISDA's global counsel on IM documentation drafting, brought deep domain expertise that gave the platform a level of precision and institutional credibility difficult for independent legal tech startups to replicate. The platform was designed to expand beyond IM documentation to cover additional ISDA agreement types over time.

ISDA Create – IM launched in January 2019 following a sandbox testing period that ran from September 2018, with approximately 65 financial institutions participating before go-live. The platform delivered two concrete outputs from every negotiation: a legally executed document and a structured dataset capturing all negotiated choices as an auditable record. By intercepting unstructured data creation at its source rather than attempting retrospective extraction, the platform broke the accumulation cycle that had made compliance-grade data analysis impractical. Qualitative outcomes included demonstrated scalability across a large cross-section of the financial institutions facing the September 2020 regulatory deadline, and validation of a build-not-buy approach that drew on Nakhoda's 30-person team including 25 dedicated developers.

• Structured data is most reliably captured at the point of creation — retrofitting extraction onto legacy unstructured documents is a high-risk, long-horizon bet given the current state of NLP technology.
• Law firms with deep domain expertise and existing client relationships can build legal tech platforms with adoption advantages that independent startups cannot easily replicate.
• Every electronic negotiation should produce two assets: the document itself and a structured data record of the choices made — treating data capture as a first-class output, not an afterthought.
• Regulatory deadlines can serve as a forcing function for platform adoption; aligning a tool's launch timeline with an imminent compliance burden significantly accelerates uptake across the industry.