Compliance: the low down on Conflicts and Anti-Money Laundering roles in a UK law firm
Updated: Jun 12, 2020
Compliance is one of the fastest growing areas in law and is a fantastic career path. But what exactly does it involve?
I often describe the Risk and Compliance team as an in-house legal function for the law firm which can be a helpful way to think about it. Teams and duties vary (vastly!) from firm to firm, but the largest part of most Legal Risk and Compliance roles are to do with Conflicts of Interest and Anti-Money Laundering. So we will be delving into these in more detail.
I should probably mention at this point, firms have some different names for their Risk and Compliance teams, so if you see any of the following you know they will be the team that looks after the Conflicts and AML for the firm:
· Business Acceptance · Client Matter Inception
· Registrations Desk · Client On-Boarding
Now is also probably a good time to mention some of the acronyms used in compliance so we know our KYC from our KFC….
Conflicts of Interest
A conflict of interest occurs when a lawyers' professional judgement is influenced by a secondary interest.
Lawyers have a duty of care to act in the best interest of their client at all times. They need to make sure they are putting them first in all instances and have to carefully consider if taking on a new client or a new matter could pose a conflict of interest with an existing one, therefore impairing their ability to act in the best interests of both clients.
Conflicts can arise in two ways:
· Between two clients - called a Client Conflict
· Between the lawyer and the client - called an Own Interest Conflict
What would I do in a Conflicts role?
Before any client can be taken on and before any new matter can be worked on a check needs to be conducted to see if it will cause any conflict of interest with an existing client, matter or with the lawyer on the case.
Every firm will have a process in place to manage conflict checking, and although this varies greatly between firms, the majority of firms are moving towards a centralised function and using Intapp to run conflicts searches on.
Conflicts Assistants, Conflicts Analysts, Conflicts Officers and Conflicts Lawyers will then work together to first assess if there is a legal or commercial conflict, and then perform analysis and produce reports on the findings.
Legal conflicts are black and white - if you and I are suing each other, the same law firm could not act for both of us.
However there is a rather large grey area when it comes to commercial conflicts. Here is where the conflicts professionals need to have commercial acumen, analytical and problem solving skills. The aim is to resolve as many conflicts issues as possible and say yes to the work to bring revenue into the firm. You can get creative, and put information barriers in place and get client waivers signed, but at all times you still need to stay within the regulations.
Money Laundering is where criminals who have made cash through illegal means try to convert it into usable cash. They will use complex structures, set up fake companies, give fake information and transfer the money many times before it comes back to them as legitimate money.
The term money ‘laundering’ is said to come from when the Italian mafia purchased laundromats as a way to mix their illegal profit with the legitimate money made from their laundry service. It also makes sense as we talk about placing ‘dirty’ money in a service company, where it is layered with legitimate income and becomes ‘clean’.
On a basic level all of us have been subject to a money laundering check for example when you have been asked for ID when you open a bank account, or when you have been asked to prove where your deposit has come from when you buy a house.
Law firms are held to the highest standard of regulations so they are a real target for criminals looking to launder their money.
What would I do in an AML role?
Here you become an investigator, you will do a lot of research into the individual or the company working out if they are who say they are, and finding the actual person or persons who are the shareholders, and look into the source of funds. You will also look for signs of bribery and corruption and will need to assess if anyone has links to a political or influential party that may be subject to bribes.
You will be on the lookout for red flags, things that might signal they are a high risk client and if so you will conduct enhanced due diligence, delving even further to look for signs of money laundering.
You will work with the team of AML Analysts, AML Officers, CDD and Client Approval Analysts, AML Managers and the Money Laundering Reporting Officer (MLRO) to assess the risk and make a judgement if it is safe to proceed.
So, is it for me?
Who can do a Conflicts or AML role?
The majority of teams in a law firm will be made up of those with some sort of legal background. For example law graduates and paralegals who have studied law but realise being a fee earner isn’t the route for them but still want to be in the legal environment and use their education and skills gained.
Equally there are a number of solicitors who have switched into these roles, enjoying the teamwork, problem solving and personable aspects the roles come with, as well as the more regular hours!
So if you have studied a law degree and have some office experience you can do a Conflicts or AML role!
Is it really a career?
Compliance is high on the agenda for law firms as if they get it wrong it can result in fines, loss of profit, litigation against them, and in some cases criminal prosecution. It is also continually evolving as new legislation is introduced, and you will be kept on your toes as the criminals get more inventive in how they will attempt money laundering!
Therefore teams are continually growing and new opportunities are arising at firms of all sizes. In turn this leads to a great path of progression from compliance assistant, to analyst/officer to manager, and alongside the progression in terms of learning and development, salaries are pretty great too!
How much can I earn in a Legal Compliance/Business Acceptance Role?
Starting Salary £25-30k
Senior Officer £40-55k
Have you been inspired to consider a career in compliance? If so send your CV through to email@example.com with the email subject LOW DOWN and we can arrange a confidential chat with one of our specialist legal compliance consultants.
As part of our process we will talk through your experience in depth and help to identify the compliance experience you already have and your transferable skills and provide advice on how to structure your CV to give you the best chance of securing an interview.
Lastly as Conflicts and AML is so interesting it has been the subject of many films and TV programmes. Check out: