In its Anti-Money Laundering Guidance for the Legal Sector 2025, the Legal Sector Affinity Group outlines a number of updated steps and processes that should be taken by law firms to comply with regulations and help prevent money laundering. Below, we have set out the Client Due Diligence compliance requirements outlined by the Law Society and how VSiD’s SmartComply platform can help you avoid penalties for non-compliance by automating your processes.

The Guidance states that “Law firms must have clearly documented PCPs based on their practice-wide risk assessment which include”:

Guidance Requirement VSiD Solution
“15. Client Due Diligence procedures (including procedures to identify the ownership and control structures of non-natural persons).”   VSiD gives you access to a full range of multi bureau KYC and KYB options according to the level of risk, including international PEPs and Sanctions and Source of Funds checks.
“16. Identification and verification (ID&V) procedures relating to natural persons (this includes ID&V procedures in relation to the ultimate beneficial owners of non-natural clients, and those purporting to act on behalf of a client).”   As a Government accredited Identity Service Provider, VSiD offers the highest possible level of identity verification, using biometric facial recognition, geo-location, NFC, 3D liveness, anti-spoof and anti-tamper technology
“17. Procedures to facilitate a clear understanding of the client’s source of wealth and funds in relation to a transaction, and the level of evidence required, in line with the risk profile of the client/matter.”   Our secure connection to FCA approved Open Banking retrieves data directly from the client’s bank to verify source of funds, highlight potential AML risks and provide copy bank statements instantly.
“18. Procedures to facilitate reporting of discrepancies between Beneficial Ownership information obtained through due diligence checks and what is held on the Companies House register.“   Our KYB checks corroborate Companies House information with other intelligence led business data providers to ensure you have the correct data.
“19. Enhanced Due Diligence procedures – including the provision of adequate controls to manage higher risk clients/transactions, and measures to establish Source of Funds/Source of Wealth where appropriate.”   VSiD uses multiple national and international data providers, together with Open Banking, to accurately verify Source of Funds/Wealth.  We also check the mortality register, PEPs, Sanctions and Fraud databases.
“20. The practice’s position on the use and application of Simplified Due Diligence.   Under R37, you may be allowed to relax the type, timing and extent of measures undertaken under CDD where a matter is eligible for Simplified Due Diligence (SDD). You must continue to monitor the relationship and transactions to ensure that SDD continues to be appropriate. You must carry out sufficient monitoring of the relationship or transaction to enable you to detect any unusual or suspicious transactions.”  VSiD can offer various levels of ID verification and provide a range of due-diligence monitoring systems, based upon the potential risk, which will alert you to any changes in status of the person or entity.   Each matter can be individually managed and automatically monitored over a pre-determined time.    
“21. The timing of any due diligence procedures: CDD must be completed before you:

• deliver substantive work or benefit; • permit funds to be deposited in your
  practice’s client account unless they
  are for fees and disbursements;  • allow property to be transferred; or  • allow final agreements to be signed
  and completed.”		 Our due diligence solutions are instant, secure and FCA approved to provide you with a fully automated KYC and AML process that comply with best practice guidelines and provide a certified audit trail and an eSignature and due-diligence authentication certificate to demonstrate to relying parties that you have carried out the appropriate checks as required under the required conformance standards.
“22. The practice’s position on the use of R39 Reliance and any related procedures.”   VSiD allows third party collaboration so that documents, audit trails and identity, KYC and AML reports can be securely shared under strict privacy rules. 
“23. The ongoing monitoring of clients and their matters.”   VSiD is one of a few providers that can offer ongoing monitoring in real time so that you can rest assured you will be alerted of any changes to the status of your client.
“24. The identification of instances where it is required or appropriate to re-apply or renew CDD or EDD on a client.”  
25. Dealing with the return of un-solicited or apparently accidentally deposited funds   N/A
“26. Identification and scrutiny of any complex or unusually large transactions, or an unusual pattern of transactions, or those which serve no apparent economic or legal purpose.”   VSiD’s proprietary software can search for unusual or large transactions, regular or irregular that may heighten suspicion of money laundering and bring them to your attention.  This automation saves hours of manual research.
27. Any additional measures to prevent products/transactions that support anonymity being used for ML/TF   N/A
“28. Identification of Politically Exposed Persons (PEPs), their relatives or close associates and the control of any associated risks”   VSiD offers instant international PEPs, Sanctions and Fraud checks using multi bureau data from many countries around the World.

Ensuring your practice is meeting its regulatory compliance obligations need not be expensive or time-consuming and VSiD can tailor make a solution that suits your workflow and can integrate our API into your existing system.  The team have in depth knowledge of AML and KYC regulations and will be happy to guide you through a demonstration of our products or set you up with a free trial.

For more information call us on 0207 7965 7479 or complete our contact form.  You can also follow us on LinkedIn for news and updates.