AML Checks & Compliance Software for Solicitors

Not all legal work is automatically in scope. The regulations commonly apply to transactional work such as conveyancing, buying or selling businesses, managing client assets, trust and company services and certain tax work. Firms should assess each matter individually because work can move into scope depending on the services provided.

For in-scope work, firms should identify and verify clients and relevant beneficial owners, complete client and matter risk assessments and apply proportionate AML checks and Customer Due Diligence. Higher-risk relationships may require additional checks, enhanced due diligence and ongoing monitoring.

Each client and matter within scope should be risk assessed, with the assessment reflecting the firm-wide risk assessment and the specific risks presented by the client and work. The outcome should help determine the level of CDD, EDD and monitoring required.

Source of Funds checks establish where the money being used for a particular matter originated, while Source of Wealth considers how the client accumulated their wider wealth. The extent of checking should be proportionate to the risks identified and the rationale should be documented.

CDD establishes and verifies who the client is and supports the assessment of the relationship and matter. Enhanced Due Diligence applies where higher money-laundering or terrorist-financing risk is identified and may involve further evidence, deeper investigation and closer monitoring.

Law firms need appropriate controls to manage sanctions risk, including consideration of clients, counterparties, entities and ownership structures. Sanctions and PEP screening can support this process, but screening results still require appropriate legal and risk assessment by the firm.

CDD should continue throughout an ongoing relationship, with the frequency and depth of review reflecting risk. Changes to ownership, funding, instructions, sanctions status or other circumstances may require the client or matter risk assessment to be revisited and additional ongoing monitoring applied.

Firms should maintain sufficient records to demonstrate the checks and controls applied, including identification evidence, client and matter risk assessments, due-diligence decisions, Source of Funds evidence where relevant, screening results, referrals and ongoing reviews. This helps evidence why the level of CDD or EDD applied was appropriate to the identified risk.

Where required, CDD cannot be completed, a firm may be unable to establish or continue the business relationship or proceed with the transaction. If the circumstances also create knowledge or suspicion of money laundering, the matter should be escalated through the firm’s appropriate suspicious-activity procedures.

Yes. SmartSearch AML integrations can connect compliance checks with existing workflows, helping firms initiate checks, retrieve results, and keep compliance information within their wider client or matter process. Firms remain responsible for assessing whether any technology they use provides an appropriate level of assurance for their due diligence requirements.