One of Schacht’s underlying contentions behind his magnum opus, “The Origins of Muhammadan Jurisprudence”, is that hadith literature did not exist in the first century of Islam. This obviously means that the isnads – the chains of narration that link a hadith report back to the Prophet – are almost completely fictitious. They cannot trace information back to the first century and consequently are not reliable sources of information on the Prophet himself or even his companions.
On the other hand, we have the statement on the origins of the isnad from Ibn Sirin (d. 110AH) who spent the early years of his life growing up in Ali’s caliphate and lived until the dawn of the second Islamic century. He says:
They did not use to ask about the isnad, but when the fitna arose, they said, “Name us your men.”
Schacht interprets this statement in light of his preconceived conclusions. He says:
We shall see later that the fitna which began with the killing of the Umaiyad Caliph Walid b. Yazid [A.H. 126], towards the end of the Umaiyad dynasty, was a conventional date for the end of the good old time during which the sunna of the Prophet was still prevailing; as the usual date for the death of Ibn Sirin is A.H. 110, we must conclude that the attribution of this statement to him is spurious. In any case, there is no reason to suppose that the regular practise of using isnads is older than the beginning of the second century A.H.
Essentially, this is Schacht’s logic: The “fitna” refers to the killing of the Umayyad caliph Walid b. Yazid, so the isnad started being used in the second century, not the first. Also, because Ibn Sirin wasn’t even alive at this time, the statement is forged anyway!
The problem with this interpretation is obvious: the “fitna” probably does not refer to the death of the Umayyad Caliph. It is more reasonable to suppose that Ibn Sirin was talking about the greatest fitna of early Islam- the fitna between ‘Ali and Mu’awiyah, only decades after the death of the Prophet Muhammad (pbuh). As other events happened during the life of Ibn Sirin that were also called by the word fitna, he probably meant the most significant one.
Harald Motzki  also rightly points out that if the statement was falsely attributed to Ibn Sirin then the forger would have taken care to specify which fitna the attribution is referring to. This is because, again, there were many such events- had the forger wanted to actually achieve his goal (of proving the Isnad to be a 2nd century invention) he would have made Ibn Sirin more specific, otherwise readers would potentially be confused as to which fitna was being spoken of.
Schacht’s argument only really works if we have very good reason to believe that the isnad did not originate in the first century. Both the works of Harald Motzki and Mustafa Al-Azami go far to dispel this claim. Further information can be found in their books, “The Origins of Islamic Jurisprudence” and “On Schacht’s Origins of Muhammadan Jurisprudence”.
 Al Azami, Mustafa. On Schacht’s Origins. Islamic Texts Society. 1996. p 155
 Schacht, Joseph. Origins of Muhammadan Jurisprudence. Oxford University Press. 1967. p 36-37
 Al Azami, Mustafa. On Schacht’s Origins. Islamic Texts Society. 1996. p 168
 Motzki, Harald. The Origins of Islamic Jurisprudence. Brill. 2002