Anti-Money Laundering

While the legal obligation for this new offence rests with large organisations, the principles underpinning it represent sound governance and risk management for all businesses. For smaller law firms, the relevance is multi-faceted:

• Best Practice and Risk Mitigation: Adopting these principles, even if not legally mandated, strengthens your firm’s defences against fraud. Fraudulent activity can cause significant financial loss and reputational damage, irrespective of firm size. Proactive prevention is always more effective than reactive clean-up.
• Client Protection: As trusted advisors, law firms often handle significant client funds and sensitive information. Implementing robust fraud prevention procedures directly enhances the protection of your clients’ interests, fostering greater trust and confidence.
• “Associated Person” Implications: Smaller law firms and their clients could potentially fall within the definition of an “associated person” to a large organisation. If a small firm (or its client) provides services to a large organisation, and fraud is committed with the intention of benefiting that large organisation (or its clients), the large organisation could be liable if it lacked reasonable prevention procedures. This dynamic underscores the importance of clear communication and robust practices across the supply chain.
• Evolving Regulatory Landscape: The trend in economic crime legislation is towards broader corporate accountability. What begins as a requirement for “large organisations” can often influence expectations and future regulations for smaller entities. Preparing now positions your firm ahead of the curve.
• Operational Resilience: A comprehensive fraud prevention framework often involves a review of internal controls, processes, and governance. This can lead to broader improvements in operational efficiency and resilience.

That pressure? I dropped the ball. And I dropped it badly.

I begged the GP not to sign me off.  I was scared of being busted for the files I was stuck on, that they’d see I wasn’t good enough. Yes, the classic case of “imposter syndrome”.

For five months I was broken. 

What “Broken” looks like

After five months I was out of credit on every credit card, so it was my Dad who was paying my bills after I’d stopped being paid after four weeks.

I wasn’t ready mentally to go back to work, but back to work I did. I couldn’t afford not to.

But I couldn’t do it anymore.

I couldn’t pretend the system wasn’t broken, I couldn’t sit back and watch my friends when they came to tell me they couldn’t handle the pressure either and they wish they were as brave as me to stand up and ask for help.

I didn’t think there was anything brave about it, I didn’t have any choice, after all, my boss had threatened to have security remove me if I didn’t go home when I was signed off (she was just trying to help me, I know).

I tried my best to make it bearable, got an informal file swap going with my mate Claire (a great friend to this day). We’d swap each other’s hard files to stop them being a problem.

I set up meetings with peers once a month for everyone to come along with their tricky files so we could workshop the answer.

My inner drive to chase that partner status had gone. It was over, I thought my life in law was over.

I took the job in the Compliance Department just to escape the feeling of being a failure in the personal injury team. 

I needed a job, and they needed someone to do training, so I took it and said goodbye to my ladder climbing.

Fortunately, the guidance is clear – if only firms heed it, plus we are here, literally guiding and holding your hand. 

In April 2025 the Legal Sector Affinity Group published a new AML guide (approved by HM Treasury), officially governing SRA firms. This updated LSAG guidance reiterates the basics that every firm needs a firm‑wide risk assessment, clear policies and procedures, up‑to-date CDD (customer due diligence) processes, and continuous training.

If you or your colleagues have received any of our training you’ll know that we really are experts and give practical advice that goes above and beyond the tick box boring exercises. 

Regulators now stress that proactive compliance is the norm, it’s just how it is, which is why Amy and the whole team here at Teal Compliance are passionate about supporting firms and allowing their compliance officers a safe space to comply. 

Analysts advise firms to focus first on a comprehensive, regularly-reviewed risk assessment (covering the firm itself and each type of client/matter). 

• Your policies and internal controls should be robust and embedded in daily work, not siloed documents on a shelf. 
• Staff training must be ongoing – the guidance emphasises that AML education is not a one-off checkbox but a continual process (for everyone from juniors up to partners). 

The SRA underscores that being in scope is about the services provided, not simply holding client money, meaning that your law firm can’t slip below the radar by reclassifying work. Don’t forget, the SRA explicitly warns firms that even a short, simple matter can trigger full obligations. 

What does this mean in practice? Simply put, law firms seriously have to work on cultivating an alert, risk-based culture, with the “tone from the top” view of compliance as an integral part of quality practice. 

Our webinar with Amy Bell and Simon McCrum and what a partner looks like when it comes to culture, cashflow and compliance is worth a watch. WATCH HERE.

If a potential red flag arises (for instance, unusually large cash payments in conveyancing, or a client reluctant to provide full information), it must be treated as out-of-ordinary, not routine.