What legal firms need to be AML compliant
Director and Founder of AMLCC and AMLCC Consult
The Legal Sector Affinity Group (LSAG)’s guidance emphasises the need for all regulated legal businesses and professionals to adopt a risk-based approach to anti-money laundering (AML) compliance. As the legal sector is considered a high-risk area for money laundering, it’s essential for regulated professionals to understand AML compliance steps, legal guidelines, and best practices thoroughly.
Where to start your AML journey
This quick guide provides a roadmap for legal professionals to navigate the complex regulatory landscape – ensure their firms are not inadvertently used to facilitate money laundering activities.
1. Your business-wide risk assessments
Identifying and mitigating AML risks facing your firm is crucial for AML compliance steps in a legal context. At the core of LSAG’s recommendations is the requirement for firms to conduct a comprehensive practice-wide risk assessment—also known as a business-wide risk assessment—with questions rooted in legal regulations.
This assessment should identify and evaluate AML risks associated with your clients, the geographic regions in which you operate, your products and services, your transactions, and your delivery channels.
By understanding your firm’s unique risk profile, you can develop tailored policies, controls, and procedures (PCPs) to manage and mitigate those risks as part of the AML compliance steps legal framework.
2. Your policies, controls, and procedures (PCPs)
Legal professionals face the challenge of translating regulatory requirements into practical, day-to-day AML compliance steps. It’s not enough to have the necessary policies and procedures. Part of this work is fostering a culture of compliance and ethical behaviour.
This commitment to AML compliance steps in the legal setting begins with senior management. They must demonstrate a clear commitment to AML regulations through their actions and the implementation of robust PCPs. After assessing your firm’s unique risk profile, develop tailored PCPs to effectively address those risks as part of your AML compliance strategy.
3. Employee training
Regular AML training for employees is essential. It equips them with the knowledge and skills to identify risk areas and report suspicious activities confidently. Your training program should cover the latest AML compliance steps, legal updates, industry guidance, and your firm’s specific PCPs. Your aim is to ensure that every member of your team is aligned and ready to uphold AML standards.
4. Your client due diligence
Beyond risk assessment and employee training, LSAG guidance stresses the importance of conducting client and matter risk assessments for every relevant file as part of AML compliance steps in the legal profession.
These assessments involve understanding the client’s source of funds and wealth, the purpose of the transaction, and any other potential areas for concern.
Again, the questions you ask clients should be rooted in AML compliance steps and legal regulations. Detailed documentation of these assessments is crucial for demonstrating compliance and creating a clear audit trail.
Why the pressure to comply?
Failing to follow AML compliance steps within the legal sector can have severe consequences. Recently, several high-profile cases highlighted legal firms facing penalties for non-compliance.
Just recently, Stratford Solicitors was fined £18,000 (2% of its turnover) for inadequate AML procedures. And Coventry-based firm Band Hatton Button was fined £46,447 on similar grounds.
These cases underscore the financial, reputational and regulatory risks of failing to meet AML compliance steps legal requirements.
Make compliance easier for your business
Our recommendation is to streamline AML compliance steps legal firms need by integrating risk assessment, policy documentation and AML training in one platform. AMLCC is the only solution that consolidates these elements, providing detailed insights on AML regulations tailored for legal professionals.
AMLCC is underpinned by a wealth of expertise and industry guidance. As a regulated professional and AML consultant, I have drawn on firsthand experience and insights from our international compliance network to develop AMLCC’s robust functionality.
By partnering with AMLCC, you can ensure that your firm meets AML compliance steps and legal obligations, safeguarding it from the significant risks associated with non-compliance.
What others have said
“We had the man from the ICAEW here yesterday to carry out a QAD practice review. We got a clean bill of health – not a single action point…That is in no small measure due to AMLCC so I just wanted to say ‘thank you’”
“Thank you for such a perfect and informative [solution]. You have given me a clear direction for my AML training and CPD.”
“I just wanted to say ‘thank you’ to you, Richard, and all the team at AMLCC for providing a service that really does minimise the burden of AML compliance.”
“What a refreshing pleasure working with a company who actually listens to the feedback from their customers and communicates with them!”
“Your team they have been excellent from the moment Fiona did a demo for me with only 15 minutes notice, and thoroughly going through the AMLCC product, answering the many questions I had! It was at this point at which I made up my mind this is the sort of business I want to work with for my AML.”
Making compliance easier
