Fraud Prevention for Law Firms – Teal Compliance Keeping You Safe
“Think Like a Crook”….What Law Firms Need to Know About Fraud Prevention
Fraud Prevention for Law Firms – Insights from Our Coffee Conversation with Amy Bell and Mark Heffer
On 1 August, I was joined by fraud prevention specialist and former detective Mark Heffer for our latest Coffee Conversation. Over Cobra Kai mugs and Starbucks water, we got right into what law firms need to be thinking about when it comes to fraud.
To catch up on our first Coffee Conversation Event (the Introduction into Fraud Prevention for Law Firms) you can catch up HERE.
And while the tone was relaxed, the message was crystal clear: every law firm needs to take fraud seriously – now more than ever.
⚠️ What the “Failure to Prevent Fraud” Law Means for Legal Sector Compliance
From September 2025, the new “Failure to Prevent Fraud” offence comes into force under the Economic Crime and Corporate Transparency Act. If your firm ticks two of the following three boxes, you’re automatically in scope:
- £36m+ turnover
- £18m+ in assets
- More than 250 employees
But even if you’re a smaller practice, don’t breathe a sigh of relief just yet. As I explained on the webinar:
“The SRA’s regulatory objectives have now been extended to include economic crime, which includes fraud. So even if you’re technically out of scope of the offence, the regulator still expects you to take fraud prevention seriously.”
🔍 Fraud Risk Assessment for Law Firms: Where to Start and What to Prioritise
Mark and I both agreed: any anti-fraud strategy has to start with a solid, honest risk assessment.
“It’s got to be inward looking,” Mark said. “Before you start looking externally, assess what risks exist inside your firm, and how well you’re actually controlling them.”
That means:
- Looking at roles, responsibilities, and who has access to what
- Reviewing policies and procedures regularly
- Checking how well you’re training staff – and when you last did it
Challenging assumptions like “that would never happen here”.
“Risk assessments are like policies, they often get written and shoved in a drawer. But the risks move on, and so must we.”
🧠 Law Firm Internal Fraud: Real Risks You Can’t Afford to Ignore
We talked about what fraud actually looks like in a legal environment – and it’s not always grand-scale organised crime.
“There was a firm recently,” I shared, “where a cashier was hiding discrepancies in the bank recs to cover a hole in the client account. That money was being used to pay staff salaries.”
That’s not just poor oversight … that’s fraud. And it can happen anywhere.
Mark brought in the concept of the Fraud Diamond, which builds on the classic fraud triangle of:
- Opportunity
- Pressure
- Rationalisation
…and adds Ability. In other words, the person not only wants and justifies their actions, they have the access and skills to do it.
🔒 Turning Existing Policies into a Robust Anti-Fraud Framework
Here’s the bit where most firms breathe a small sigh of relief. You’re probably not starting from scratch. As I said on the webinar:
“Most firms already have a lot of the elements in place. This is about applying a new lens – a fraud lens – to what you’ve already done for AML, bribery, and tax evasion.”
The core building blocks remain the same:
- Top-level commitment
- Proportionate policies and procedures
- Regular fraud risk assessments
- Screening and controls for high-risk roles (yes, that includes BD consultants and referrers)
- Firm-wide training, including non-fee earners
- Monitoring and regular review
🛡️ Fraud Prevention Services for Law Firms – Build Your Defence with Teal
As we said after our last webinar on the subject of law firm fraud, actioning your firm’s safety now is always the best time!
We’re already helping law firms with:
- Fraud risk assessments
- Bespoke fraud training
- Internal control audits
- Policy and procedure reviews
And you don’t have to wait for the offence to be enacted, in fact, it’s far better if you don’t.
👉 Book your Fraud Audit or Training with us at Teal Compliance and make sure your firm is ready before the regulator comes knocking.
Got questions? Need help figuring out your next steps? Drop me or one of my colleagues a message. Gary Yantin is our go-to problem solver!
