Top 20 Legal IT Innovations 2017: A&O and Deloitte's MarginMatrix - a mini law firm in your computer
A&O partner David Wakeling explains the firm's digital derivatives compliance system, developed in partnership with Deloitte
November 09, 2017 at 06:55 AM
5 minute read
Last year, Legal Week Intelligence, in association with Fulcrum GT, profiled 20 innovators driving change in the legal sector. We focused on what inspired these figures to shift their views and how this bred innovation. In 2017, we look at the innovations themselves.
The Top 20 Legal IT Innovations report aims to get to the heart of what innovation means by illustrating how new ways of doing things, large or small, local or global, have shaken up a sector often characterised as slow moving and resistant to change.
Click here to download the report from Executive Insights (free, registration required).
MarginMatrix is a digital derivatives compliance system delivered by Allen & Overy (A&O) in conjunction with Deloitte's managed services team. Ostensibly, the platform is the product of multiple talents. But as a concept, it was the brainchild of A&O partner David Wakeling (pictured).
"After the decision to implement global regulation with a focus on the derivatives market, we knew something big was coming," says Wakeling. "It became clear looking at how regulations were developing that regulators meant business. In all the major global financial institutions, this was going to be a major event that no one had ever seen before."
Together with support from management, Wakeling, who describes himself as "a lawyer and amateur tech developer", went off for three months to deliver a practical solution for clients. "I wanted to come up with something without any client engagement in an incubated environment, as a tech-based solution."
Wakeling had a history of developing tech products: Default Management – a tech tool to manage counterparty default – and Project X, a joint venture with Axiom. But neither was on the scale of MarginMatrix, which he describes as "like a mini law firm in its own right."
He defines the concept: "We codify the laws in lots of regimes in one big system. There is a very extensive auto-document drafting function within the system. The codifying laws concept tells you what law is required, the system then auto-generates the documents. It drafts the first offer by our clients to their counterparties outlining what the margin arrangement and credit support arrangement would look like."
My team of associates were pretty adept at coding
However, Wakeling appreciated that there are tens of thousands of contracts that have to be negotiated. "We don't have enough lawyers to do that with derivatives expertise, or even without derivatives expertise," he says. So A&O turned to Deloitte to develop a joint venture. The ultimate goal was to come up with a fixed unit cost for clients. By ditching the billable hour, he explains: "They would know that we were motivated to be efficient."
Wakeling built the basic systems architecture in Excel, addressing three regimes simultaneously: EU, US and HK. "It then got flipped into our e-business team, who built a prototype with some of my team of excellent associates, who – impressively – were pretty adept at coding," he says. "So we had something very credible to show clients. In parallel, I was arranging the Deloitte joint venture. We then started a joint marketing campaign in December 2015, going to banks and saying: 'we are going to offer you an end-to-end solution'."
The first client followed in January. MarginMatrix became fully operational last September, when the new regulatory requirements came into force. "It's the closest thing to a standard template, and closely follows the ISDA documents," says Wakeling. Nearly 400 people worked on it over several months. After eight major bank clients had signed up, the marketing stopped. "We filled up all the spots we were comfortable taking," he explains. "Nearly 30,000 negotiations – we thought we should draw a line there. Relative to the total global market of around 150,000, we have quite a lot of them."
So what did Wakeling learn from the experience? "When I first embarked on it, I thought the really clever thing was that we could give the right legal opinion to say this meets requirements in seven jurisdictions, and that we could manage this number of contracts. That's obviously very appealing to clients. But what I hadn't fully recognised is the importance of data flows and the precision that MarginMatrix provides – that's the most valuable thing."
The Top 20 Legal IT Innovations 2017 report is available to download for free from Executive Insights. Click here to download the full report (registration required).
- Innovation and new ideas in law will be top of the agenda at the LegalWeek Connect event later this month, with a big-name line-up of speakers gathering on 29-30 November at London's Institution of Engineering and Technology to discuss these issues and more. Click here for all the details.
NOT FOR REPRINT
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
You Might Like
View AllCan Labour's New Budget Steady the Ship? Big Moves On UK Tax Reform and Fiscal Stability
5 minute readGreenberg Takes 7-Lawyer Project- and Structured-Finance Team From Dentons in Warsaw
3 minute readTrending Stories
- 1Infant Formula Judge Sanctions Kirkland's Jim Hurst: 'Overtly Crossed the Lines'
- 2Election 2024: Nationwide Judicial Races and Ballot Measures to Watch
- 3Guarantees Are Back, Whether Law Firms Want to Talk About Them or Not
- 4How I Made Practice Group Chair: 'If You Love What You Do and Put the Time and Effort Into It, You Will Excel,' Says Lisa Saul of Forde & O'Meara
- 5Abbott, Mead Johnson Win Defense Verdict Over Preemie Infant Formula
- 6How Much Does the Frequency of Retirement Withdrawals Matter?
Who Got The Work
Michael G. Bongiorno, Andrew Scott Dulberg and Elizabeth E. Driscoll from Wilmer Cutler Pickering Hale and Dorr have stepped in to represent Symbotic Inc., an A.I.-enabled technology platform that focuses on increasing supply chain efficiency, and other defendants in a pending shareholder derivative lawsuit. The case, filed Oct. 2 in Massachusetts District Court by the Brown Law Firm on behalf of Stephen Austen, accuses certain officers and directors of misleading investors in regard to Symbotic's potential for margin growth by failing to disclose that the company was not equipped to timely deploy its systems or manage expenses through project delays. The case, assigned to U.S. District Judge Nathaniel M. Gorton, is 1:24-cv-12522, Austen v. Cohen et al.
Who Got The Work
Edmund Polubinski and Marie Killmond of Davis Polk & Wardwell have entered appearances for data platform software development company MongoDB and other defendants in a pending shareholder derivative lawsuit. The action, filed Oct. 7 in New York Southern District Court by the Brown Law Firm, accuses the company's directors and/or officers of falsely expressing confidence in the company’s restructuring of its sales incentive plan and downplaying the severity of decreases in its upfront commitments. The case is 1:24-cv-07594, Roy v. Ittycheria et al.
Who Got The Work
Amy O. Bruchs and Kurt F. Ellison of Michael Best & Friedrich have entered appearances for Epic Systems Corp. in a pending employment discrimination lawsuit. The suit was filed Sept. 7 in Wisconsin Western District Court by Levine Eisberner LLC and Siri & Glimstad on behalf of a project manager who claims that he was wrongfully terminated after applying for a religious exemption to the defendant's COVID-19 vaccine mandate. The case, assigned to U.S. Magistrate Judge Anita Marie Boor, is 3:24-cv-00630, Secker, Nathan v. Epic Systems Corporation.
Who Got The Work
David X. Sullivan, Thomas J. Finn and Gregory A. Hall from McCarter & English have entered appearances for Sunrun Installation Services in a pending civil rights lawsuit. The complaint was filed Sept. 4 in Connecticut District Court by attorney Robert M. Berke on behalf of former employee George Edward Steins, who was arrested and charged with employing an unregistered home improvement salesperson. The complaint alleges that had Sunrun informed the Connecticut Department of Consumer Protection that the plaintiff's employment had ended in 2017 and that he no longer held Sunrun's home improvement contractor license, he would not have been hit with charges, which were dismissed in May 2024. The case, assigned to U.S. District Judge Jeffrey A. Meyer, is 3:24-cv-01423, Steins v. Sunrun, Inc. et al.
Who Got The Work
Greenberg Traurig shareholder Joshua L. Raskin has entered an appearance for boohoo.com UK Ltd. in a pending patent infringement lawsuit. The suit, filed Sept. 3 in Texas Eastern District Court by Rozier Hardt McDonough on behalf of Alto Dynamics, asserts five patents related to an online shopping platform. The case, assigned to U.S. District Judge Rodney Gilstrap, is 2:24-cv-00719, Alto Dynamics, LLC v. boohoo.com UK Limited.
Featured Firms
Law Offices of Gary Martin Hays & Associates, P.C.
(470) 294-1674
Law Offices of Mark E. Salomone
(857) 444-6468
Smith & Hassler
(713) 739-1250