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Re-opening your office and ensuring compliant client on-boarding post lockdown

As offices across the UK re-open following a long period of lockdown, there are bound to be loads of things on your ‘to-do’ list. Not least because the legal sector has been forced to put some critical tasks on the backburner while navigating the challenges of Covid-19.

As your firm weighs up the necessary tasks and attempts to prioritise the urgent and important, make sure that onboarding compliance is top of your list if you don’t want to fall foul of the SRA.

The latest anti-money laundering guidance for the legal sector

Following the implementation of the EU’s 5th Money Laundering Directive, the Legal Sector Affinity Group (LSAG) has reviewed and redrafted the anti-money laundering (AML) guidance. And if you haven’t yet familiarised yourself with the changes, now is the time to do so.

AML compliance is a professional duty. The SRA is actively checking that firms are complying with the regulations – often via spot checks – and it is becoming increasingly proactive. So, not staying abreast of the latest AML requirements could be devastating.

Client onboarding

A risk assessment is required whenever a firm takes on a new client. There is a huge list of things to be considered under the latest regulations. For example:

  • There is guidance around source of wealth and source of funds. While solicitors tend to focus on source of funds (where the money is coming from and how they got it), legal professionals need to go further to truly understand a client’s financial situation. For example, for a conveyancer, source of wealth could include assessing where the buyer lives now compared to where they are planning a purchase and investigating any red flags.
  • The guidance also includes practical examples of situations where solicitors should be on heightened alert over things like the client themselves, the source of funds, the nature of the transaction, etc. There are also practice specific warnings.

You can read the latest AML guidance for the legal sector in full here

Legal technology

A new section of note in the guidance looks at technology and its impact on AML compliance. This acknowledges for the first time that paper-based ID checking may not be the best approach. In response, firms who haven’t yet done so should invest in legal onboarding technology to help them protect against fraud by ensuring clients are who they say they are.

Failure to comply is not an option

The AML regime (made up of the Proceeds of Crime Act, Terrorism Act and Money Laundering Regulations) establishes that solicitors do not have to have knowingly helped a money launderer to be guilty of a crime. Not having the correct processes and controls in place is also an offence. And, with so much required of law firms – it’s all too easy to get something wrong.

In September 2021, a law firm owner was banned from holding compliance roles and fined £25,000 (later reduced by 50% due to his limited means) for ignoring his AML responsibilities which would have revealed a client as a politically exposed person (PEP).

The good news is that, with the right legal technology partner, firms can have complete confidence in the client onboarding process.

Compliant client on boarding with Minerva

As you look to re-open post lockdown, making sure your on-boarding solution   is compliant with the latest AML guidance is vital. Today, the SRA favours electronic identification verification (also known as eIDV), which can pick up on fraud techniques that are not always obvious to humans.

With secure real-time ID verification, paperless end-to-end onboarding, and a 97% accuracy rate, with Minerva you can safely and securely verify in minutes.

Augmenting the critical thinking skills of your team and meeting the HMLR advised Safe Harbour requirements, Minerva combines biometrics, cryptographic evidence, and the latest passive liveness technology to on-board in confidence. And its robust technology-driven onboarding solution can automatically undertake comprehensive ID checks against thousands of documents (e.g. driving licenses, utility bills, bank statements, etc.) to ensure a match.

To find out more about how your firm can benefit from a robust, secure, and compliant onboarding solution, click here.

Minerva - the only onboarding solution your law firm needs.

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