Welcome to the Regulation & Compliance Office’s fortnightly roundup, where we look at all the latest stories to keep you ahead and informed in the world of law and compliance. The RACO roundup is just another way in which we keep the solicitors and other law professionals we work with in the know, 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 a Security Section that provides an overview of the latest scams currently impacting solicitors and their clients.

SRA Fines Law Firm £14,751 for Six Years Without Essential AML Controls

The Solicitors Regulation Authority (SRA) has fined a law firm £14,751 after it operated for six years without fundamental anti–money laundering (AML) controls. The case highlights the critical importance of robust compliance, especially as the Financial Conduct Authority (FCA) prepares to take over AML supervision.

Key Findings from the SRA Investigation:

• No Firm-Wide Risk Assessment (FWRA): Required since June 2017, only implemented in July 2023.
• Missing Policies, Controls, and Procedures (PCPs): Templates existed but were not in practical use until 2023.
• No Client and Matter Risk Assessment (CMRA): Reviewed client files showed no evidence of risk assessments at the instruction stage. Staff Training Gaps: Lack of awareness and understanding of compliance responsibilities contributed to the failings.

Why This Matters for Your Firm:

• Firms cannot rely on tick-box policies; compliance must be practical, relevant, and demonstrable.
• With the FCA’s risk-based, data-driven supervision, gaps in AML frameworks will face closer scrutiny.
• Common failings include incomplete risk assessments, ineffective policies, and inconsistent client due diligence.

How to Protect Your Firm:

• Conduct and maintain a comprehensive Firm-Wide Risk Assessment.
• Ensure policies and procedures reflect actual business practices.
• Implement a consistent Client and Matter Risk Assessment process for all in-scope matters.
• Provide regular AML training to all staff, including one-to-one sessions for MLROs and
  MLCOs

RACO Can Help:

• Regulation & Compliance Service: Bespoke support to achieve a fully compliant environment.
• Outsourced Guidance & Support: Day-to-day compliance support, relieving internal compliance officers.
• Due Diligence & Risk Assessment Service: End-to-end handling of client due diligence and risk assessments.
• AML Training Courses: Tailored training for staff and compliance officers to meet regulatory obligations.

Don’t wait until FCA supervision exposes gaps in your AML framework. Ensure your firm is fully compliant today. Read the full blog here

Preparing Your Law Firm for AML Supervision Move to FCA

The Financial Conduct Authority (FCA) will soon take over anti-money laundering (AML) supervision from the SRA, representing a major shift for UK law firms. While the exact timeline is unconfirmed, firms are strongly advised to prepare now to ensure compliance with the Money Laundering Regulations 2017 (MLRs 2017) and meet FCA expectations.

Key Recommendations for Firms:

• Conduct or Update a Regulation 21 Independent Audit Identifies risks, regulatory gaps, and areas for improvement. Often best outsourced for independence and credibility.
• Move Beyond Tick-Box Compliance Demonstrate that AML controls actively prevent money laundering risks. Regularly test frameworks, review files, and monitor outcomes.
• Consistent File Review and Supervision Standardise supervision across teams and practice areas. Use external file reviews, escalation triggers, and quality checks.
• Implement Strong Ongoing Monitoring Regular transaction analysis, client risk reassessment, and automated alerts. Proactive monitoring is essential to satisfy FCA requirements.
• Re-evaluate Clients Regularly Trigger re-assessments for clients changing practice areas, instruction value, or risk profile. Ensure policies include clear re-evaluation protocols.
• Senior Management Accountability Compliance must be a board-level responsibility. Assign specific responsibilities and tie performance metrics to compliance outcomes.
• Gap Analysis Against FCA Standards Review policies, governance, systems, training, and reporting to meet FCA expectations.
• Review Technology Infrastructure Modernise systems for case management, client screening, transaction monitoring, and reporting. Ensure integration, real-time analytics, and FCA-ready data capabilities.

Why Act Now:

• FCA supervision will be data-driven and proactive, with no tolerance for weak compliance.
• Early preparation ensures your firm avoids enforcement action and strengthens its competitive position.
• Dual regulation with the SRA or other professional bodies requires careful coordination of compliance frameworks.

RACO Support Services:

• Regulation & Compliance Service: Tailored frameworks, risk assessments, and AML support.
• Outsourced Guidance & Support: Day-to-day compliance management and staff support.
• Due Diligence & Risk Assessment Service: Full handling of client onboarding, CDD, and CMRA documentation.
• MLR 2017 Regulation 21 Independent Audit: Independent review of AML compliance frameworks.
• AML Training Courses: Annual and one-to-one training for staff and MLRO/MLCOs.

Prepare your firm for FCA AML supervision to avoid gaps, reduce risk, and demonstrate robust compliance. Read the full blog here.

Scam Alerts:

Warning: Emails and website claiming to be for ‘Berrycloth Solicitors’

Key Details

A fraudulent website, berryclothuk.com, is impersonating a non-existent law firm called Berrycloth Solicitors. Emails have been sent from noreply@loyaltyworx.co.za and Robert@berryclothuk.com, falsely claiming to be from staff members “Helen Perry” and “Robert Berrycloth”. The site and associated email addresses are not connected to any SRA-regulated firm or individual.

How to Protect Your Firm

Treat any correspondence claiming to be from “Berrycloth Solicitors” with caution. Avoid engaging with the website berryclothuk.com or the related email addresses. Ensure your team is aware of this scam and remind them of internal verification procedures when unexpected legal correspondence is received.

Stay Alert

If you receive communications of this nature, independently confirm authenticity using trusted contact details – never those provided in the suspicious message. Check directly with the SRA for regulated firms or individuals, and use additional verification such as public directories or company records where appropriate.

Read the full alert here.

Warning: Emails and Invoices misusing the name of Bird & Bird LLP and Victoria MacDuff

Key Details

Fraudulent emails and invoices are being sent in the name of Bird & Bird LLP, falsely claiming unpaid professional fees. The messages are sent from accounts@twobirdslaw.onmicrosoft.com, dd@lwllp.site, vmc@lwllp.site, and dv@lwllp.site, and reference a supposed “Victoria MacDuff”. Neither the firm nor the individual is connected to these communications.

How to Protect Your Firm

Do not respond to or pay any invoices from the addresses above. Remind your team to verify unexpected legal invoices carefully and only use official, established contact details when confirming legitimacy.

Stay Alert

Always check the authenticity of emails claiming to be from known firms or individuals. Confirm regulated status through the SRA, verify contact information independently, and use additional sources such as company records or public directories to prevent falling victim to identity-based scams.

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.