Ask any compliance officer at a law firm what keeps them up at night, and commercial source of funds will be near the top of the list. It is not just a regulatory checkbox. It is a multi-stakeholder, document-heavy, time-consuming process that strains the relationship between fee-earners and AML teams. All this in an environment where the SRA issued record fines in 2025 and the FCA is taking over as sole AML supervisor for the legal sector, getting it wrong has never been more consequential.

Legl has spent years building the market-leading source of funds solution for residential conveyancing. Now, for the first time in the UK LegalTech market, that same capability has been extended to commercial transactions. It’s already making a huge impact on firms.

The High Stakes of Getting Source of Funds Wrong

The Solicitors Regulation Authority's 2025 AML report made uncomfortable reading for the profession. Source of funds and source of wealth checks were among the top reasons for SRA referrals, with investigators finding documents collected but never analysed, explanations that did not match the origin of funds actually received into client account, and CDD completed in form but not in substance.

Across 2025, the SRA conducted almost double the number of proactive AML engagements compared to the prior period, and fines across 35 firms exceeded £565,000. The message from the regulator has shifted decisively: policies and procedures are no longer enough. What matters is evidenced, embedded practice. For complex corporate matters, this is really hard to get right.

There are proposals for the FCA to become the sole AML supervisor for law firms, replacing 22 professional body supervisors and bringing with it the kind of enforcement intensity the financial services sector has experienced for years. For law firms still relying on manual, unstructured source of funds processes, the window to fix this is narrowing.

Why Residential Conveyancing and Commercial Source of Funds Are Fundamentally Different Problems

Legl's source of funds approach for residential conveyancing is already well-established as best in class. The residential workflow is relatively contained: a client needs to demonstrate that their deposit, savings, inheritance, mortgage etc are legitimate. The types of documents are predictable, and crucially, there is typically one client who can supply all the information required for a firm to do the appropriate analysis.

Legl guides those clients through a structured, AI-enabled process that collects the information quickly and securely, then applies AI analysis to parse the data: grouping high-risk transactions, flagging cash deposits, identifying overseas payments, and cutting the time fee-earners spend reviewing statements from hours to minutes. Firms using Legl's residential solution have seen significant, measurable time savings. These firms have turned what was a back-and-forth, painful paper chase into a streamlined digital journey.

Commercial source of funds is a different problem entirely.

It is not simply that the documents are different, though they are. The fundamental challenge is structural. When acting on a commercial transaction, you are not dealing with one person who knows where their money came from. You are likely dealing with a complex business in which financial information is held across multiple departments, multiple individuals, and multiple systems. Internal approvals may be required. The finance director holds one piece of the picture. The GC holds another. Relevant documents may sit with external stakeholders like accoutants. And all of this needs to be compiled, organised, evidenced, and analysed against a regulatory backdrop that demands it be done thoroughly and quickly.

For fee-earners, this means being the coordinator, chaser, analyst, and reviewer all at once. For compliance and AML teams, it means a never-ending cycle of back-and-forth with the client (and the fee-earners) requests for documents that arrive incomplete, questions that get lost in email chains, and a growing pile of evidence to assess before a matter can progress.

Legl's Commercial Source of Funds: A Delegation-First Approach

The insight that underpins Legl's commercial source of funds offering is that the problem is not just about collecting documents, it is about getting the right information from the right people, in a way that is structured enough to make analysis meaningful.

Legl's platform introduces delegation flows for commercial source of funds work. Rather than sending a single, sprawling request to a primary contact and hoping they can pull everything together, the client themselves can assign specific information or document requests to particular individuals within their business. The right question goes to the right person. The right stakeholders are brought into the process. Nothing falls through the cracks.

This transforms the client experience as much as the firm's internal process. Instead of receiving an undifferentiated list of requirements and being expected to figure out how to respond, the client's team receives structured, specific requests that they can act on individually. The result is faster, more complete information, and a transaction that moves forward rather than stalling.

For compliance and AML teams, who have long been caught in the middle of that painful back-and-forth cycle, this is material relief. The structured approach means that when information does arrive, it arrives in a form that is ready to be assessed - not a loose collection of PDFs that need to be categorised, cross-referenced, and chased for gaps.

AI-Enabled Analysis: Seeing Risk Clearly, Quickly

Once the information is collected, the challenge shifts to analysis. Commercial transactions can involve large volumes of financial data like months of bank statements, complex inter-company movements, director's loans, international transfers. Fee-earners and compliance teams alike are often in the weeds on this process, spending hours reviewing data that, with the right tooling, could be assessed in a fraction of the time.

Legl's platform enables businesses to connect their bank accounts via open banking or to share bank statements directly, and then does the analytical heavy lifting. Transactions are parsed and categorised automatically. High-risk groupings like cash deposits, overseas payments etc are surfaced clearly, so fee-earners can direct their attention to the areas that actually warrant scrutiny rather than reviewing every line.

Legl is currently the only provider in the UK LegalTech market to offer this combination: AI-enabled document analysis, open banking connectivity, and structured delegation flows. This all is included within Legl’s single client lifecycle management platform. Firms do not need to stitch together multiple tools or manage separate vendor relationships. The entire commercial source of funds workflow lives in one place, alongside CDD, Risk Assessments, Payments, Ongoing Monitoring , and Client Onboarding.

Better for Fee-Earners. Better for Compliance. Better for Clients.

The impact of this capability plays out across three relationships that have historically been points of friction.

For fee-earners, the time saved is significant. Billable hours currently consumed by chasing documents, reviewing raw data, and coordinating across a client's organisation can be redirected to work that benefits clients directly. The quality of analysis does not suffer. In fact, it improves, because AI-enabled parsing is more consistent and more thorough than manual review under time pressure.

For compliance and AML teams, the relief is structural. The endless loop of requesting, receiving incomplete information, re-requesting, and re-reviewing is replaced by a process that is designed to collect complete, well-structured information the first time. The audit trail is built in. The evidence is organised. The analysis is documented. Teams can spend their precious resources unpicking genuinely high risk signals rather than drowning in noise.

For clients, the experience is night and day compared to the traditional approach. A well-structured, digital process with clear tasks, clear delegation, and a clear sense of what is needed and why signals that the law firm takes compliance seriously without making it feel like an obstacle. It builds confidence at a moment in the relationship when trust matters enormously.

Already Available, Already Working

Commercial source of funds in Legl is not a roadmap item. It is available now, as part of Legl's client lifecycle management platform. It was built by working deeply with Legl’s 500+ firm customer base to understand the nuances of solving this challenge for firms that are dealing with complex work types in their corporate teams. For firms already using Legl, it is a step in the existing workflow that can be adopted without onboarding a new vendor or integrating a new system.

Legl works with over 50 of the UK's top 200 law firms, and this capability has been developed in close collaboration with those customers. These firms understand the complexity of commercial source of funds and have been waiting for a solution that matches it. The development of commercial source of funds reflects Legl's broader commitment to solving the harder problems in legal AML, not just the straightforward ones.

For firms that have already seen what Legl's residential source of funds product can do, commercial source of funds represents the natural next step. It brings the same rigour, the same intelligence, applied to the types of corporate / commercial work that have always been harder to solve for.

Getting Started

If your firm is managing commercial source of funds through email chains, spreadsheets, and manual document review, the cost in fee-earner time, compliance resource, and client experience is real. With the enforcement environment only intensifying, so is the regulatory risk.

Legl's commercial source of funds capability is available today. Speak to the Legl team to see how it fits into your existing client lifecycle management workflow, and to understand what the transition looks like for firms at your scale.