Anti Money Laundering Checks for Solicitors Practical Buyer Guide

Why are Anti-Money Laundering (AML) Checks Critical for UK Law Firms?

Anti money laundering checks are a legal requirement in the United Kingdom. Solicitors and law firms alike face unique risks as they may manage client funds, facilitate property transactions, and be exposed to complex structures involving multiple jurisdictions. As such, these sector-specific vulnerabilities make them prime targets for money launderers and criminal activity.

The Solicitors Regulation Authority (SRA) notes that entities offering a combination of legal services, such as solicitors, are at the greatest risk in the sector. Notably, conveyancing, trust or company services, and the misuse of client accounts are particularly vulnerable to financial crime.

Over £100 billion is laundered through the UK every year.

According to the National Crime Agency (NCA), over £100 billion is laundered through the UK every year. The impact of financial crime is damaging; it can hamper growth and security on a national level. As such, regulators have tightened anti money laundering regulations.

HMRC issued over 739 fines for AML and Counter-Terrorism Financing (CTF) breaches from 2024-25.

In HM Treasury’s AML and CTF Supervision Report, penalties imposed by the SRA for AML violations amounted to £1.5 million. In contrast, the FCA levied more than £59.5 million in fines from 2024 to 2025. This marks greater expectations for UK law firms to strengthen and invest in comprehensive anti money laundering checks.

Who Sets AML Regulations in the UK Legal Sector?

Understanding the regulatory bodies that oversee anti money laundering checks is critical to determining which requirements must be met. This is crucial to remain compliant, as fines have increased in both frequency and severity. Here are the primary regulators UK solicitors must know:

• Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLR 2017): The main rulebook that sets out AML and CTF obligations for regulated firms. It sets out requirements for Customer Due Diligence (CDD), ongoing monitoring, and risk assessment.
• Proceeds of Crime Act 2002 (POCA) and the National Crime Agency (NCA): Creates offenses and reporting duties, such as submission of a Suspicious Activity Report (SAR) to the NCA. Operates alongside the MLR2017 and centers on cases where solicitors fail to report suspicious transactions.
• HM Treasury and the Office of Financial Sanctions Implementation (OFSI): Maintains and sets out UK financial sanctions policy. On the other hand, the OFSI arm implements enforcement actions against companies that violate sanctions policy.
• The Solicitors Regulation Authority (SRA): Designated AML supervisor built specifically for firms operating in the legal sector across England and Wales. It oversees registration, supervision, and enforcement of AML checks for solicitors.
• Financial Conduct Authority (FCA): AML and CTF supervisor of a broader range of firms in the UK. Unlike the SRA, the FCA is a financial regulator with greater authority to enforce registration, conduct risk-based supervision, and impose penalties on non-compliant firms.

In October 2025, the UK government announced that the FCA will assume the powers of a single professional services supervisor for AML/CTF compliance. Consequently, it will take over supervision from the SRA, the Law Society of Scotland, the Law Society of Northern Ireland, and other professional bodies. As a result, solicitors and other legal services will face more demanding AML requirements.

Must all UK Solicitors Comply with AML Requirements?

Under the MLR 2017, any company or individual carrying out “relevant business,” such as conveyancing, managing client money, company formation, trust work, or tax advice, must comply with the UK’s AML obligations. Moreover, the SRA states that anti money laundering checks do not differentiate between large firms and sole solicitors.

Non-negotiable Requirements for AML Checks for Solicitors

Anti money laundering checks for solicitors are more than identity checks. They must include Ultimate Beneficial Owner (UBO) verification, source of funds and source of wealth checks, ongoing monitoring, reporting of suspicious activity, and more. Here are the core obligatory AML checks for solicitors:

Customer Due Diligence (CDD)

CDD involves verifying and assessing an individual’s identity, relationships, and associated money-laundering risks. For individuals, verification is done primarily through documents, address, and biometric verification. For corporates and trusts, CDD can entail corporate registry searches, and UBO verification is required for individuals who exercise over 25% control in a business.

Source of Wealth (SOW) and Source of Funds (SOF) Verification

Source of wealth and Source of funds checks help solicitors understand a client’s financial background. SOF establishes the origin of transactions, while SOW assesses how a client achieved their total asset. Although crucial, many law firms fall short of this requirement. From 2024 to 2025, 11% of the files the SRA reviewed lacked SOF checks, and 8% had information that did not support the client’s explanation.

Enhanced Due Diligence (EDD)

The MLR2017 calls for comprehensive EDD workflows for higher-risk customers. For instance, examples of high-risk factors include Politically Exposed Persons (PEPs), links to a high-risk jurisdiction, complex ownership structures, or unusual transactions. EDD processes require further information on a client’s background and may require senior management approval or frequent reviews.

Sanctions, PEP, and Adverse Media Screening

Businesses in the legal profession are accountable for countering financial crime and terrorism financing. To build a defensible AML framework, it is mandated to screen clients against sanctions, PEP, and adverse media data sources. These checks, therefore, help solicitors identify high-risk clients who may pose money-laundering risks.

Risk Assessment and Risk-Based Approach (RBA)

Under Regulation 18, regulated businesses must conduct and maintain an updated record of their risk assessments. As a result, solicitors are required to document a client’s risk profile, potential risks, and rationale for onboarding. In particular, a risk-based approach helps firms allocate resources in proportion to the identified risk level, strengthening financial crime prevention.

Suspicious Activity Reporting (SAR) and Ongoing Monitoring

Ongoing monitoring throughout a customer or business relationship ensures that a client’s account reflects the current risk they carry. This is crucial as new risks can exist after onboarding. Furthermore, a Money Laundering Reporting Officer (MLRO) has a duty to alert the NCA where they suspect suspicious activities or transactions.

Evaluating Anti Money Laundering Checks for Solicitors

A practical framework for selecting anti money laundering checks for solicitors will assess how well it meets compliance and security requirements while maintaining high operational efficiency. There are six key areas to consider for UK solicitors considering AML checks:

1. Pricing: Assess how the selected pricing tier can handle volume increases, EDD, and ongoing monitoring to understand the total cost of ownership. Also, ensure you confirm setup, maintenance, and integration fees upfront to avoid hidden costs.

2. Data breadth and quality: Consider AML solutions that provide updated, reliable data sources for PEP, sanctions, adverse media, and Companies House screening. Assess whether the solution supports the checks relevant to your firm, including identity verification and, where appropriate, UBO verification for the jurisdictions and client types your firm serves.

3. Risk-based controls and configurability: A suitable AML platform should enable solicitors to apply varying levels of due diligence based on client and matter risk. As such, consider whether workflows, risk scoring, escalation rules, and reviews can be configured to reflect your firm’s policies.

4. Integration: Invest in an AML platform that integrates easily with your existing onboarding and case management processes. For example, relevant API, SDK, and CRM integration helps reduce duplicate data entry and make AML checks easier to incorporate into day-to-day legal workflows.

5. Auditability and oversight: Regulators expect firms to demonstrate how AML decisions are reached. Thus, AML checks for solicitors should offer and log records of checks, risk assessments, supporting evidence, approvals, alerts, and changes over time.

6. Security: Strong security controls help solicitors protect sensitive information and meet UK data protection requirements. Law firms should assess whether an AML solution supports UK GDPR compliance and holds relevant certifications, such as ISO 27001. Essential features may also include multi-factor authentication and role-based access controls.

Essential vs. Differentiating AML Capabilities for Solicitors

Once the broader evaluation criteria have been considered, firms can look more closely at individual product capabilities. Features such as no-code workflows, complete global coverage, and dynamic workflow routing can save time, provide scalability, and enhance compliance operations. As such, UK solicitors are encouraged to assess and score them against the business’s priorities and needs.

While investing in an all-in-one automated AML platform may seem complex at first, it can provide operational benefits for UK solicitors. A unified solution can help reduce false positives, data fragmentation across third-party vendors, and manual checks without weakening record-keeping or compliance oversight.

Strengthen AML Compliance in the UK

Choosing the right anti money laundering checks for solicitors goes beyond basic identity verification. The legal duty to identify and combat financial crime falls on UK law firms. As such, it is important to invest in solutions with adequate measures for EDD, ongoing monitoring, and clear audit trails.

Additionally, selecting AML checks with strong data quality, integration, and automation can strengthen compliance without creating operational friction. Learn more about how you can implement ComplyCube’s law firm-focused AML platform to meet stringent compliance obligations today.