Transparency and consistency are the foundational elements of effective and efficient AML and CDD processes.
And not only do the processes need to be clear and well-communicated, management teams and compliance teams need to have firm-wide visibility and oversight to ensure standards are met, and processes are followed correctly. Technology plays a key role in bolstering processes, stopping bad actors, and mitigating the risk of fraud.
Many law firms struggle with AML compliance and client due diligence, as it requires a comprehensive approach that leverages people, process, and technology to achieve the best outcomes.
Here are some of the common challenges across these three areas:
People
- Building a compliance culture
- Creating effective training and knowledge sharing programmes
- Ensuring escalation points, supervision and oversight
Process
- Ensuring consistency and leveraging automation where possible
- High touch, manual, administrative process
- Disjointed processes that increase the risk of error and mistakes
Technology
- Multiple sources of information and solutions used
- No centralised location with key compliance information
- Data quality and accuracy
Challenge: People
In the absence of an embedded compliance culture, there can be friction between teams in firms – particularly between those that are focussed on new client acquisition and billable work, and those in AML risk and compliance roles. We’ve heard all too many times of a lawyer commenting that the compliance team are “trying to make their lives difficult”. This is usually a symptom of a fragmented approach across the firm to managing AML compliance, and an indication that the importance of the regulatory requirements has not been understood across the firm.
The SRA Code of Conduct reminds firms that any individual who is not taking their compliance duties seriously poses a risk not only in terms of their personal career and finances, but also the firm and to the careers and finances of their colleagues – “A serious failure to meet our standards or a serious breach of our regulatory requirements may result in our taking regulatory action against you.”
It’s really important that staff have adequate knowledge and understanding of the firm’s risk-based approach, and how they need to support the practice.
The Solution
Complying with AML regulations needn’t be an added stress for fee earners. Using technology to create consistent processes for your team, to deliver bank-grade KYC Implement Legl to eliminate hours of admin from fee-earning staff by digitising client management work. Think beyond AML and IDV checks – you get a rich source of funds data flow, business structure mapping, and secure electronic signatures.
Legl is at the forefront of legal technology – evidenced by the swift delivery of bank grade CDD reports for a high level of confidence, which helps empower staff to help the firm spot and manage risk.
Challenge: Processes
Manual processes undertaken in law firms create lots of time delays and impacts on firms’ profitability – because substantive work can’t be started until onboarding checks are completed. These delays can often be more than 2 weeks, including lots of emails back and forth with clients to explain the documents required.
The Solution
With Legl’s no code workflow builder, law firms can create processes for different clients, matter types, or departments to automate the repetitive tasks (like getting CDD completed or sharing the TOBs with the client). Legl enables law firms to leverage simple tools to automate processes without hefty IT input.
With a centralised source of truth, and audit trails downloadable from Legl at the click of a button, compliance officers can be in complete control at all times – and respond to unexpected audit requests in moments. Not only that, but they can proactively monitor operations to resolve any potential breaches and non-compliance before they become an issue for your firm.
Challenge: Technology
Many firms are burdened with multiple disjointed systems for business processes, payments, case management, and compliance – all working in silos.
These “point solutions” were adopted by many just to solve the problem of business continuity during the pandemic, but the most tech-forward firms started planning for the longer term – aiming to automate many of their expensive and time consuming processes with integrated systems that talk to each other.
The Solution
Legl quickly and easily streamlines firms’ time consuming back office processes like payments, onboarding, and risk & compliance – all whilst delivering a delightful digital client experience.
With a suite of out of the box integrations, firms can combine the power of Legl with your case and practice management systems to even greater effect. Get paid faster through automated reconciliation, reduce file opening times with seamless client-facing workflows, and establish consistent and compliant onboarding processes.
Summing up
Ensuring firm-wide compliance with regulatory requirements necessitates a strategic approach that leverages people, process and technology to their full effect. The key objective for firms is to be able to do more, and faster, all whilst ensuring that there is a single source of truth and consistency across processes.
The best technology solutions available on the market can further all three areas:
- Modular, workflow driven solutions that can enable robust, consistent processes across different client types, practice areas or client risk profiles.
- Well-designed and intuitive tools that make it easy for staff to read reports, find key information, and automatically provide clear audit trails.
- Dashboards that enable real-time visibility across the firm’s client base for effective oversight and supervision.
