Linklaters unveils CreateiQ platform following digitisation of ISDA Master Agreement

Linklaters has today (23 February) formally unveiled its new client contract automation platform, CreateiQ, which has already been applied to digitise the ISDA master agreement in the derivatives space.

CreateiQ has been hard coded by Linklaters’ technology arm, Nakhoda, and is not based on third party tech. It leverages the knowledge of Linklaters lawyers in the contract drafting process and creates structured data at the point of contract creation.

While Linklaters stresses that CreateIQ is not derivatives specific, the showcase work done recently is in digitising the ISDA master agreement, which is central to every swap trading agreement. Subscribers sign up to individual document packs and there are both flat fee and volume-based pricing options.

The master agreement can be automatically created up to the point that negotiation is required, without needing to be customised. We’re told that there are now nearly 30 companies in the Fortune 500, and eight of the 10 world’s largest banks by assets using the platform. 

In a joint Linklaters/ISDA demonstration on 9 February, the ISDA community was told that the Nakhoda team has been working with lawyers to categorise and tag content, for example, all termination events under the master agreement. It has broken them apart to work out variations so that two clauses in the agreement with similar tags are actually identical.

In a live demo, Linklaters senior attorney Heather Smith showed how the document automation boxes and drop-down menus are on the left, and the master agreement on the right. The selections such as whether you are doing business a ‘principal agent’ or ‘umbrella agent’ automatically change the standard ISDA wording accordingly. The appropriate appendices are added according to your selection.

This type of document automation has been available for years and in that sense this breaks no boundaries, what is different is that it is developed and sold by the tech arm of a magic circle law firm working in tandem with a client. Complex automation has historically suffered from a lack of input/time and continued expertise. The fact that Linklaters has its own tech arm and is working hand-in-hand with an invested client means, in theory, a more effective and regular exchange of information.

What is also helping to push the envelope is the capture of metadata for future reference and analysis and Smith said: “This creates structured data. For each event where you are choosing a party within the ISDA master agreement, each is a label that creates structured data which is computer readable.”

Both sides to the negotiation fill in the form to the extent they are able, and Smith said: “There is a built-in approval functionality that will automatically trigger an email saying, ‘take a look, this is not our standard term.’”

In the demonstration, ISDA’s director of product development, Andrew Kayiira, highlighted how a dashboard shows the stage that negotiations are at and where the documents are, meaning ISDA Create can also be used as a superficial transaction management platform, although there is no intention for it to stand on the toes of deal platforms.

Commenting on the launch of CreateIQ, Shilpa Bhandarkar, CEO of Nakhoda, commented in a statement: “As a leading global law firm, we are uniquely placed to understand the challenges our clients face in each stage of the contracting process. 

“With CreateiQ, we have built a single workflow that brings contracting into the digital age, saving our clients significant time in the drafting, negotiation and execution of contracts and allowing lawyers to spend much more time on high value work.” 

Stuart Bedford, corporate partner (London) and Nakhoda board member, concluded: “We built the platform to be both sector and document agnostic and we have already had discussions with clients in a range of industries about automating their documentation. Examples to date include procurement contracts, customer agreements, leases and intra-group finance and supply agreements to name but a few. 

“We believe that CreateiQ has a significant role to play in the digitisation and automation of the negotiation of legal documentation at scale.”

In this space other firms such as Allen & Overy are also working to automate finance agreements with the Loan Markets Association, but in that instance they are working with third party tech vendor Avokka. The Magic Circle are leading in setting up separate tech arms through which to sell subscription-based tech products. A&O has been doing it for years and Clifford Chance in 2018 lauched Applied Solutions – one of the products being sold is white-labelled document automation solution CC Dr@ft, which uses Thomson Reuters Contract Express.