A profession operating ahead of its frameworks
In March, Sydney Shannahan from the Teal Compliance team attended the Law Society’s Risk and Compliance Conference 2026.
The agenda covered AI, regulatory change, economic crime and firm culture. What stood out was how often the same topics and questions came up: AI, FCA supervision, uncertainty and the importance of data ran through almost every session.
If you weren’t able to attend, here are some of the key topics and practical takeaways.
The expanding scope of compliance
Paul Bennett opened the conference by describing compliance professionals as the “Swiss army knife” of their firms. He noted that, for many, the role now spans AML, ethics, governance, training, systems and culture, and is increasingly involved in wider operational and strategic decisions.
Paul highlighted that, as that scope expands, firms are still working through how best to define, structure and prioritise the function in practice, particularly how it fits into the wider business. He also described the SRA as a “teenage regulator”, reflecting its continued development and its evolving relationship with the profession. This sense of transition was a recurring theme throughout the conference.
AI in legal practice: opportunity and uncertainty
Andrew Hogan’s keynote speech explored both the potential and uncertainty surrounding AI, questioning whether it will prove transformational for the profession, or “little more than a stock market pump-and-dump dressed in silicon clothing”.
Andrew noted that AI is already being used across the legal sector, and is best suited to structured, repeatable work such as:
- Legal research
- Drafting and document review
- Disclosure
- Administrative processes
Andrew also raised the question of how this shift impacts existing billing models. As time inputs reduce, firms are having to rethink how value is assessed and priced. He added that, during any transition, different models are likely to coexist, with the behavioural and commercial implications that come with that.
The SRA: priorities and pressures
In a session with Ian Jeffery, Sarah Rapson, the newly appointed CEO of the SRA, set out the regulator’s current focus and direction of travel. She outlined four priorities for 2026:
- Improving operational excellence
- Moving from reactive to proactive regulation
- Tackling “the big” systemic issues
- Developing a more collaborative tone with the profession
Sarah emphasised the importance of rebuilding trust with the legal community and strengthening that relationship, while also acknowledging the impact of recent firm failures on both clients and the reputation of the sector.
She also highlighted the scale of activity, noting that the SRA received 3,000 reports in December 2025 alone. Sarah described the current model as “not sustainable”, explaining that it remains heavily enforcement-led and does not always make full use of the wider regulatory tools available; an area she indicated will evolve over time.
Culture, leadership and decision-making
The plenary session focused on how issues arise in practice, often driven by day-to-day pressures rather than exceptional events, and how leaders should respond.
Jodie Hill emphasised the importance of psychological safety, noting that people need to feel able to speak up when something goes wrong. She highlighted leadership as a key factor in whether that is embedded in practice. Antony Dunkels also noted that the culture of a firm is often a “mirror image of its leadership”.
Lucinda Soon explored common causes of mistakes, including:
- Overconfidence
- Time pressures
- Similarity bias
- Confirmation bias
- Reliance on cognitive scripts
In response to a question from Xavier Langlois on AI replacing lawyers, she emphasised that decision-making should remain with individuals, rather than being delegated entirely to systems.
Lucinda also discussed the concept of a “just culture”, focusing on understanding which process or policy has failed, rather than which individuals are at fault. This shift towards systems-based analysis was one of the most insightful points on culture raised throughout the day.
Larger firms: AML, data, structure and FCA supervision
In the breakout session for larger firms, Rebecca Bell, Rebecca Atkinson and Harriet Holmes focused on AML and compliance pressures in that context, and how firms are preparing for what comes next.
The panel discussed key priorities, including:
- Building scalable onboarding and risk teams
- Mapping processes to identify where human input adds the most value
- Using technology to support this effectively
The panel also discussed FCA supervision of AML, noting an estimated transition timeline of two or more years. They also considered the risk of dual regulation and the potential for overlapping enforcement. Firms were encouraged to use this interim period to:
- Strengthen existing AML frameworks
- Improve data capabilities
- Engage with FCA guidance, such as Dear CEO letters
The Mazur case was referenced, with the panel advising firms to clearly define and document roles and responsibilities, and ensure internal promotions trigger a review of relevant qualification requirements.
The discussion also covered ACSP services, with polling on the day suggesting that over 50% of firms present are not planning to offer ID services in that capacity. The panel advised that firms who do choose to offer this need to be mindful of the nuanced differences between AML and ACSP requirements and clearly specify the circumstances in which they are willing to act.
Governing AI in practice
The second AI panel, featuring Harry Clark, Arjun Rohilla, Pearl Moses and Nisha Morjaria, focused on how firms are approaching implementation in practice.
A clear message emerged: responsibility for effective AI governance sits with the firm. Vendors will not be held accountable for errors, and firms must be able to explain their use of AI to regulators, courts and clients.
Arjun Rohilla highlighted insurer expectations, particularly around defined controls, pilot groups and careful rollout, noting that AI should be used to “de-risk” firms rather than introduce additional exposure.
Harry Clark gave practical tips on securing internal buy-in, including:
- Starting small with pilot groups
- Involving teams in design and process development
- Identifying internal champions
Nisha Morjaria described AI as an “enabler” rather than a replacement, emphasising the importance of maintaining human involvement in legal decision-making.
Investigations, enforcement and supervision
The session on investigations and enforcement, led by Paul Bennett, Susanna Heley and Andy Donovan, reflected both recent experience and ongoing uncertainty.
Susanna Heley noted that the SRA has acknowledged resource constraints. However, Paul Bennett said that he had observed improvements in the SRA’s communication in recent weeks and described the overall direction of travel as positive.
The panel discussed the upcoming transition to FCA AML supervision, and the uncertainty that remains, particularly around:
- Implementation timelines
- Cost implications
- How enforcement may operate in practice
They suggested that the FCA may take a more impact-focused approach, rather than a purely volume-based one.
The panel also emphasised the importance of developing a no-blame culture, encouraging curiosity and learning, while recognising the need to balance this with addressing issues appropriately and in line with regulatory expectations. They highlighted internal supervision as a key operational consideration, particularly ensuring that it applies across all levels, including partners.
Economic crime and horizon scanning
The final session, featuring Emma Williams, Andrew Cheung, Colette Best and James Hicks-Williams, focused on emerging risks and future developments.
Emma Williams captured the level of uncertainty across the profession, noting that “we can talk and talk and talk but nobody actually knows”. The panel discussed a potential timeline of two to three years for FCA supervision.
Colette Best’s practical recommendations for the next 18 months were:
- “Clear your desk” of non-AML priorities to create capacity to prepare
- Maintain focus on current obligations
- Avoid compliance gaps during the transition period
The panel discussed the anticipated increase in oversight and data requirements, and how reporting may change under FCA supervision. They also covered ongoing monitoring, sanctions counterparty screening and source of funds.
When asked what keeps them awake at night, Andrew Cheung pointed to the level of uncertainty across the profession and the challenge of reflecting that within risk appetite and decision-making. Emma Williams highlighted the practical challenge of managing people through that same uncertainty.
Colette Best also raised the emerging discussion around banks potentially reviewing the CDD of lawyers’ clients in pooled accounts, which could introduce a significant administrative burden, as well as wider data considerations. James Hicks-Williams discussed the impact of AI on early-stage careers, particularly how entry-level roles may evolve.
Final thoughts: navigating uncertainty in legal compliance
The Law Society Risk & Compliance Conference 2026 highlighted several areas that are all developing at pace: AI, FCA supervision and data were consistent threads throughout the day, alongside practical discussions on culture, governance and implementation.
In many ways, the profession is evolving faster than the frameworks designed to regulate it. One of the most useful reminders from the day was the importance of ensuring that, in the face of all this uncertainty, firms’ processes and controls remain robust.
While the SRA refocuses, AI continues to develop, billing models evolve, the geopolitical landscape shifts and the detail of FCA supervision becomes clearer, firms still need to operate in the meantime. The key takeaway is clear: firms cannot afford to wait, but must remain diligent while these frameworks catch up.
That gap between change and clarity is where many firms are currently operating, interpreting evolving expectations and turning them into practical, day-to-day processes. At Teal Compliance, that’s where much of our work sits, helping firms navigate a fast-moving regulatory landscape and turning uncertainty into clear, defensible processes firms can rely on.
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