Law firms are still struggling to produce compliant, individualised risk assessments to tackle anti-money laundering and firms need to embed a cultural awareness of risk from the top down, according to a panel of legal experts and regulators.
On Wednesday 29th January 2020, Today’s Conveyancer hosted its first roundtable event of the year at one of the UK’s oldest and largest chambers, 3PB Barristers, in Birmingham.
Given the immediate impact the Fifth Anti-Money Laundering Directive (5AMLD) is having on property sector compliance, delegates were gifted the opportunity to discuss concerns and successes with the SRA’s Director of Anti-Money Laundering, Colette Best.
The SRA has reiterated the fact that a fifth of the 7,000 firms under their regulation are still producing non-compliant risk assessments.
The majority of firms (63%) used a template to produce their risk assessment, resulting in more generic documents that weren’t necessarily well-tailored to the firm’s risks.
Whilst senior management, law firm associates and partners have a working understanding of AML risks, those in attendance believed that effectively communicating this would help to create more compliant and holistic processes.
Later discussions considered the growth of electronic ID verification technology following the Fifth anti-money laundering directive’s (5AMLD) specifically outlined that electronic ID is available to help tackle AML.
Both the Council for Licensed Conveyancers (CLC) and SRA have insisted there is no regulatory barrier to its use and regulators will remain agnostic to providers.
Later discussions also requested clarity from regulators over the nuanced differences in the roles of money laundering compliance officers (MLCO), money laundering reporting officers (MLRO) and compliance officer for legal practice (COLP) roles.
Those in attendance discussed these roles in greater detail with many law firm representatives claiming that the current risk outlook means these roles are now considered full time positions as opposed to an additional responsibility.
Before closing the session, delegates discussed the importance of recognising legal professional mental health. There was a perception that traditional legal sector structures are helping to perpetuate historic ways of completing legal services which may inadvertently fail to ease mental health issues.
There was a need to embed a cultural shift in the legal sector by acknowledging the needs of the modern legal service professional and adapting approaches to become conducive with the modern world.
Whilst many firms may offer flexible working, embedded cultural practices may not promote a balanced working life and mental health.
One law firm discussed the benefits they have experienced from banning the use of workplace email communication between 7pm and 8am in order to recognise the balance needed.
Similarly, delegates suggested law firms should encourage regular breaks and try to differentiate between pressurised and stressful situations.
Overall, the legal sector and law firms were viewed as lacking adequate training to help organisations, so they are able to identify mental health issues and effectively support employees.
