Posted by Yazad Bajina, director at Legal Futures Associate Checkboard [1]
Bajina: Firms need to adopt a ‘whole team’ approach
Checkboard has a vision for 2026. We want to see law firms start taking anti-money laundering (AML) compliance as seriously as it deserves.
This means treating it not as a tick-box exercise or a procedural necessity, but as a serious part of company culture.
New regulator, same dangers
The Financial Conduct Authority (FCA) is set to take over the reins as the new AML regulator for the legal sector, and many firms are starting to consider how this will affect their existing AML frameworks.
While we expect the underlying regulations to stay broadly the same – for the time being, at least – law firms should expect a new supervisory style shaped by the FCA’s experience as a financial services regulator.
It won’t be looking at process alone, but also for evidence of control effectiveness, senior accountability, and strong ongoing monitoring and risk assessments.
That means a tick-box mindset will become increasingly risky.
And despite the change in regulator, many of those risks are familiar ones. The property market continues to be among the highest-risk areas for money laundering in the UK.
Murky ownership structures, high-value transactions and time-pressured completions make property fertile ground for money laundering risk. Criminals launder tens of billions of pounds through UK property every year, and too often the legal profession lends these criminals legitimacy they crave.
So, law firms working in and adjacent to the property sector, including conveyancers, need to take particular care of their AML frameworks in 2026.
A whole-team approach
Checkboard’s approach to AML compliance highlights ongoing monitoring as well as onboarding checks, because we believe the regulators will increasingly emphasise a whole-relationship approach to risk.
Regulators will not only ask firms whether checks have been carried out, but also the decision-making process behind their risk assessments. It’s not just about completing forms, but about taking a holistic, considered approach to risk befitting the nature of each transaction or relationship.
But this approach exposes the limitations of the tick-box mindset. If AML responsibility is simply a matter of procedure, in the hands of a money laundering reporting officer or compliance officer, it can become disconnected from day-to-day legal work. This means risk can slip past the radar.
Instead, firms need to adopt a whole-team approach, where compliance is a cultural issue embedded in every legal matter.
A shared responsibility
The firms that will adapt best to the new expectations around compliance are those that treat AML risk as a shared responsibility and embed compliance as a cultural issue.
By involving the entire team in AML compliance, they can be trained to recognise red flags and better understand where certain relationships warrant closer scrutiny. Then, rather than a one-off matter in the hands of an individual, compliance becomes a continuous process that runs throughout the entire legal workflow.
And while technology can play an important role in supporting this shift, without cultural change it can simply become window dressing, or worse, actually accelerate poor decisions.
That’s why firms need to pair technology adoption with better oversight, a holistic approach to risk assessment, and a team-wide understanding of risk and compliance.
We hope law firms will embrace fresh new approaches to compliance that will help tackle evolving money laundering risks, strengthen client trust, and free the legal profession from reputational, regulatory and financial risk.