A Costly Wake-Up Call: £17,000 Fine Highlights Growing AML Risks for Small-Medium Solicitor Firms
A recent enforcement action has sent a clear message to the legal profession: regulators are losing patience with firms that treat anti-money laundering (AML) compliance as optional or outdated. A Northwich law firm has been fined almost £17,000 after failing, for more than a decade, to maintain compliant AML systems, policies, and controls.
While the figure itself may not seem eye-watering, the circumstances are significant. This was not an isolated oversight — it reflected a prolonged absence of core regulatory safeguards.
What Went Wrong?
The SRA found the firm had no adequate firm-wide risk assessment, insufficient AML policies, and little evidence of staff training or oversight. In short, foundations that should be non-negotiable were missing.
For firms who may be quietly relying on outdated procedures, this case offers a stark reminder: historic compliance is not enough. Regulators expect active, current risk management.
Why This Should Concern Every Solicitor
1. Compliance Is Now a Standing Obligation
AML is no longer about having a dusty policy in a drawer. The landscape has changed — with expanding sanctions regimes, evolving client risks, and supervisory scrutiny at an all-time high.
2. Mitigation Only Goes So Far
Even where firms cooperate, regulators are still imposing significant fines if breaches are sustained or systemic. Good character and clean history will not save a firm from the consequences of complacency.
3. Reputational Risk Is the Real Cost
Fines can be managed. Public findings cannot. A published AML breach undermines client confidence and casts doubt over a firm’s professional judgment.
Practical Steps Firms Should Be Acting On Now
Update Firm-Wide Risk Assessments (FWRAs)
Ensure they reflect current practice areas, client profiles, geopolitical risks, and sanctions exposure.
Refresh AML Policies and Procedures
Policies must be more than templates — they should align with how your firm actually operates.
Document the ‘Why’ Behind Client Decisions
Especially for high-risk clients or transactions. Regulators want to see the reasoning, not just the result.
Deliver Targeted Training
Annual tick-box training is no longer sufficient. Supervisors, fee-earners, and support staff require role-specific guidance.
Embed Review and Audit Mechanisms
Regular internal audits or file reviews show proactive governance should scrutiny ever come.
A Sector Under the Microscope
This fine is part of a wider regulatory trend. Over the past 18 months, the SRA has issued multiple AML-related penalties — some exceeding £100,000. The message is frank: if firms cannot demonstrate control of risk, the regulator will.
Final Thoughts
AML compliance is no longer merely regulatory housekeeping — it is an integrity test. Firms that fail to evolve will be left exposed, not only to financial penalties, but to questions over their professional standing.
If you’re unsure whether your firm’s current framework would withstand supervisory review, now is the time to act — long before the SRA or Law Society comes knocking.
