In this Issue: The AML Experts’ View on Navigating Compliance in 2025 ??

To kick off 2025, we’ve asked three leading anti-money laundering (AML) experts to share their insights on what UK legal firms can expect in the year ahead. ??

?? Here’s what’s coming down the track – and where you should focus your attention:

Kayleigh Smale, Director, Smale Compliance Services Ltd.

??SRA Visits and Source of Funds Thematic Review

"The Solicitors Regulation Authority (SRA) has confirmed it will continue supervisory visits this year, with a focus on Source of Funds and Source of Wealth. It’s a good time to consider a mini-review to ensure your firm is on track.

??? UK’s AML National Risk Assessment Update

An update to the UK’s National Risk Assessment of money laundering and terrorist financing is expected this spring. This could impact your firm’s risk status, so it’s something to watch out for.

?? Money Laundering Regulations Consultation

We’re likely to see changes to the Money Laundering Regulations, as part of efforts to reduce financial crime. The recent consultation, which closed in June 2024, focused on improving customer due diligence, system coordination, clarifying MLR scope, and reforming Trust Registration Service requirements.

HM Treasury is still reviewing feedback, and we’re hopeful for an update soon.

Even with potential changes in government, both parties remain committed to tackling financial crime—so the work shouldn’t go to waste!"

?? Alicia Tooth, Compliance Manager, BPE Solicitors

?? Law firms will face increased scrutiny

“Regulatory scrutiny will continue to intensify, particularly around compliance and onboarding practices. Less than a quarter of firms reviewed by the SRA in the last year were found to be fully compliant, according to its Anti-Money Laundering Annual Report 2023–24.

As an industry, we must be proactive. A key priority for all law firms should be staying educated and up to date, with a strong focus on maintaining competency.

?? SOF and SOW will be critical

Source of Funds and Source of Wealth will remain critical concerns for regulators. These concepts are often misunderstood, so we need to use the data we gather effectively to identify and flag high-risk factors.

?? Need to combat evolving risks

The rise of AI-powered tools has enabled criminals to produce highly convincing fraudulent documents. As compliance professionals, we must stay ahead of these evolving methods, and equip ourselves to detect and address potential risks.”

?? Joanne Clarke, MLRO and Head of Risk & Operations, Lester Aldridge

?? Scrutiny and fines set to continue

“2025 is no doubt going to be another year of increased SRA scrutiny for all regulated firms. The trend in AML related fines, both in terms of quantity and quantum, is likely to continue upwards.

It will be interesting to see the outcome for those individuals and firms who have challenged SRA enforcement action which has been taken against them.

?? Risk assessments and technology manage risk

On a practical level – quality risk assessments, ongoing monitoring and monitoring of high-risk work will continue to be a focus area for many firms. Utilising technology, and integration between various tech options, is going to be key in driving efficiencies, streamlining processes and improving management oversight of risk.

???? Smooth client experience is key

Also key, when using technology, is a smooth client experience when it comes to onboarding and that is something we have had excellent feedback on in relation to the Legl platform."

?? AML News you can use

SRA hands out highest ever fines

??A Birmingham Law Firm was fined ￡27,000 for AML Failures, according to the Law Society Gazette in an article published earlier this month. The fine followed an investigation that revealed the firm lacked proper anti-money laundering (AML) measures, including risk assessments and policy documents, from 2017 until September 2023. It was acknowledged that the firm had implemented compliant processes ‘promptly’ after feedback was provided, and it cooperated fully with the investigators.

?? Just published: The role of the MLRO

A new article on the Legl blog explores the key responsibilities of Money Laundering Reporting Officers (MLROs) in the legal sector, including managing suspicious activity reports and implementing effective AML processes. It offers practical insights on how MLROs can carry out their duties while aligning compliance with the firm's operations. Read the article here.

??Customer Spotlight

Discover how BPE Solicitors enhanced client onboarding with the Legl platform for a seamless customer journey.

Read more here: Streamlining the Client Journey with Legl

?? Social and events roundup

??? Events and dates for your calendar

On 11th March 2025 you'll find the Legl team at the British Legal Technology Forum in Billingsgate.

??The Law Society Risk and Compliance Annual Conference 2025 takes place 12th March in London and online. This flagship conference offers in-depth discussions and practical workshops on compliance issues, including AML, tailored to legal professionals.

???Risk and Compliance Week This year, the Law Society is offering a week of risk and compliance-related activities, including exclusive discounts on relevant courses and publications for legal professionals.

We hope you found this newsletter a useful source of insight around AML for legal professionals. ??

?? Got ideas for topics you'd like to see covered? Share your feedback and ideas here.