Onboarding business clients remains one of the most complicated and time-consuming activities law firms have to undertake.
In a recent webinar, Kate Burt, Head of Risk & Compliance, and Lauren Watson, Director of Partnerships, discussed the obligations placed on law firms to undertake due diligence on businesses.
Also under the microscope was a deep dive into some of the common challenges facing law firms – including complex structures and high risk countries, and how law firms can leverage technology for the best outcome.
Watch the full webinar here.
The current climate
As highlighted by the SRA at the COLP/COFA conferences this year, there are new challenges and considerations for law firms to tackle in this changing macro climate. From Russia’s illegal invasion of Ukraine to likely periods of prolonged economic uncertainty, law firms need to consider emerging threats and adapt their processes and approach accordingly.
Kate Burt shared her observation that lots of UK firms who handle matters with international elements, or work for international clients are more nervous and cautious about their approach, with particular concern for their PII renewals, and how their work might impact that.
In light of the economic challenges facing firms, Lauren observed that more firms are interested in credit risk and credit scoring for new company clients as a way to mitigate business risks.
Challenges with onboarding private and unlisted overseas companies
Onboarding listed companies in a regulated market is a much simpler process for law firms than unpicking private and unlisted overseas companies’ structures.
Some challenges include:
- Identifying and verifying beneficial owners
- Overarching approach to working with businesses from high risk third countries
- Lack of publicly available corporate and beneficial owners registers
- Ownership can be concealed through the use of nominees
To mitigate these challenges, firms should adopt a risk-based approach. A firm’s practice wide risk assessment should be the first port of call, and firm-wide policies, controls, and procedures should support a firm’s approach to risk.
Certification of documents does not automatically guarantee that the documentation is genuine, so enhanced due diligence measures should be applied.
How can technology enable your teams to do more and accelerate your processes?
Technology can help your firm and your teams to manage AML compliance processes efficiently and effectively. By leveraging technology that is built and designed for law firms, you can enhance your processes, empower your teams and mitigate risks in your firm.
Lack of oversight
Real-time dashboards & audit trails
High effort to unpick complex business structures
Instantly generate reports and simple 1-click workflows to request client information
Onboarding is time-consuming for both firms and clients
Accelerating information gathering by digitising processes to suit your firm
Centralising information and creating consistent processes
More costly for law firms
Speeding up processes and enabling greater efficiency
Adopting a client-centric approach
- Make the experience simple for your teams and for your clients
- Remove lengthy back-and-forth with clients to collect the correct information
- Deliver a professional, modern and secure way for clients to share information
Ensuring a single source of truth
- Automatic audit trails created that document who did what, and when
- Centralise the information about the client in one place
- Enable effective oversight and visibility across processes
- Monitor client base on an ongoing basis with notification and escalations built in
- Leverage biometric identity verification to make your processes more robust
- Use workflows to create consistency in compliance processes and removing risks of error
How can Legl support today’s law firm challenges?
Legl can help your law firm to meet the requirements in your risk-based approach. We understand that law firms will have different requirements, and our solution is flexible and modular to accommodate this.
With the ability to instantly generate company reports for over 160 countries, you can gather key information about structure and ownership independently of the client. With credit scoring and other useful information integrated into the reports, we enable a comprehensive approach to client due diligence.
Whether you want to carry out a quick PEPs/Sanctions screen on an individual, or whether you want to collect an array of documentation or information, or carry out IDV on a beneficial owner, Legl’s flexible workflows can accommodate all your processes and requirements.
Creating consistency and simplicity for your teams and clients alike, workflows are easy to create for different departments, matter types or clients.
By leveraging Legl’s client-facing workflows, your firm can deliver a professional, modern experience to your clients. They can securely supply the key information, documentation and complete processes like biometric IDV in a few clicks, from a device of their choosing, at a time of their choosing.
Legl provides a comprehensive platform to manage compliance in a cost-effective way. It helps firms to ensure that processes are consistent, that results have high accuracy, and that compliance teams have visibility across the firm’s client base.