Welcome to the Regulation & Compliance Office’s roundup, where we look at all the latest stories to keep you ahead and informed in the world of law and compliance and your monthly compliance update for Scottish law firms
The RACO roundup is just another wayinwhich we keep the solicitors and other law professionals we work with intheknow, so we can ascertain that you are never missing the vital developments occurring in your profession. Below, you will find the most recent headlines selected by our compliance experts, followed by an updates section for the latest news and insights from The Law Society of Scotland!
Preparing Your Scottish Law Firm for the FCA’s AML Supervision
Here’s what many Scottish law firms don’t realise about the upcoming FCA takeover of AML supervision:
The FCA doesn’t care about your procedures manual. They want proof your AML controls actually prevent money laundering risks.
The problem with most firms’ current approach:
- Documentation-heavy but light on demonstration
- Inconsistent file reviews across teams
- Reactive monitoring instead of proactive
- Senior management too hands-off
- Outdated technology that can’t deliver FCA-level analytics
What the FCA will expect:
- Transaction monitoring with measurable outcomes
- Regular testing that proves controls work
- Board-level compliance accountability
- Real-time risk monitoring capabilities
- Data analytics and comprehensive reporting
The firms that prepare now will have a significant advantage. Those that wait will face an expensive scramble when implementation is announced. RACO can help you build a compliance framework that meets FCA expectations -starting from £300/month.
Our Services include:
- Regulation 21 Independent Audits
- Gap analysis against FCA standards
- Ongoing compliance guidance and support
- AML training for your entire team
- Technology infrastructure assessment
The investment in preparation is far more cost-effective than FCA enforcement action.
Act now: Don’t wait until FCA supervision exposes gaps in your AML framework. Ensure your firm is fully compliant today.
Contact Us info@regulationandcomplianceoffice.com to Discuss Your FCA Preparation or make an online enquiry here.
Read the full blog here
AML Reforms and Scottish Law Firms – What FCA Oversight Means for Your Legal Practice
Quick update:
The FCA will replace the Law Society of Scotland as your AML supervisor. While implementation will take time (legislation, execution plan, transition period), smart firms are preparing now.
Why The FCA is different:
The FCA is known for stricter compliance expectations and rigorous enforcement. They supervise with a no-nonsense, outcomes-focused approach that differs significantly from professional body supervision.
What you should do now:
- Reviewyour AMLpolicies- Ensure they align with FCA expectations, particularly risk assessments and customer due diligence
- Train your team – Staff need to understand the FCA’s approach to AML
obligations and suspicious activity reporting - Get expert support – Work with advisors who understand FCA regulation
RACO’s experience:
We already work with multiple FCA-regulated clients across various sectors, so we’re familiar with their regime and what they expect. Our services include:
- Policy and procedure reviews
- Team training on FCA requirements
- Outsourced compliance support from £300/month
- Regulation 21 Independent Audits
The firms that prepare proactively will have a competitive advantage when supervision transfers.
Until the change takes effect, continue meeting The Law Society of Scotland requirements.
Contact Us info@regulationandcomplianceoffice.com to Discuss Your FCA Preparation or make an online enquiry here.
The Law Society Updates
Law Society calls out flawed approach in legal aid consultation
The Law Society of Scotland has warned that proposed changes to legal aid fees for adults with incapacity (AWI) cases would worsen the existing shortage solicitors for this work.
The Proposal:
Introduce block fees (fixed payments) for AWI cases cases instead of time-and-complexity-based payments.
The problem:
- Solicitors are already underpaid for AWI work
- Block fees would fall far short of covering the actual work involved
- Access to justice for vulnerable people would be further eroded
Law Society position: Block fees are unsuitable for legally complex cases involving vulnerable groups. While administrative burden reduction is needed, this is the wrong approach.
Peter Walsh, Co-Convener of the Legal Aid Committee: “Solicitors can’t afford to take on these cases if block fees are introduced. Access to justice for extremely vulnerable people will be further eroded.”
Read the full alert here.
Law Society publishes new guidance on NDAs for solicitors
The Law Society of Scotland has published new guidance for solicitors on accepting instructions and advising on non-disclosure agreements (NDAs) and confidentiality clauses.
Key Points:
- NDAs are legitimate tools but solicitors must consider if they’re appropriate in each case
- Acting on improper instructions breaches Practice Rules and could lead to disciplinary action
- NDAs must never be used to prevent reporting criminal offences, harassment, misconduct, or regulatory breaches
- Solicitors should withdraw from acting if clients refuse to change instructions that breach rules
Warning:
Clauses that are unenforceable, fraudulent, or prevent legally protected disclosures constitute rule breaches.
The guidance provides clarity on when to challenge client instructions and steps to take when NDAs may be inappropriate.
Read the full alert here.
BEEN CONTACTED? Here’s What to Do…
When a firm’s or individual’s identity has been copied or cloned, due diligence is necessary. If you receive correspondence you believe to be suspicious, you should conduct your own due diligence by checking the authenticity of the correspondence by contacting the law firm directly by reliable and established means.
You can also contact the SRA directly to find out if individuals or firms are regulated and authorised by the SRA and verify an individual’s or firm’s practising details. Other verification methods, such as checking public records (e.g. telephone directories and company records), maybe required in other circumstances.
Reach out to RACO
We at RACO are always at hand to provide tailored guidance to help you make the most informed and beneficial decisions. We help you understand the recurrent regulatory shifts and work with you to provide solutions. With our team of professional specialists and our renowned legal expertise, we can work with your firm to always ensure you are never left unprepared in the wake of legal changes or cyber threats.
For more information on how we can help, call our consultants on 0203 985 8550 or email us at info@regulationandcomplianceoffice.co.uk
