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 Publishes Thematic Review of Source Of funds and Wealth Compliance
Serious Compliance Failings Found Across the Legal Sector
The Solicitors Regulation Authority (SRA) has released a new thematic review on Source of Funds (SoF) and Source of Wealth (SoW) compliance, and the message is clear: too many firms are still falling short on core AML requirements.
What the SRA found
While awareness of SoF/SoW obligations is generally good, supervision over the last three years uncovered repeated weaknesses, including:
- Evidence collected but not properly assessed (documents taken at face value without scrutiny).
- Poor record-keeping with missing audit trails and unclear rationale for decisions.
- From 5,800+ files reviewed in 2024–25, 11% had no SoF checks and 18% showed inadequate scrutiny.
- In 8% of cases, the SoF recorded in the ledger didn’t match supporting evidence.
Why firms struggle
The SRA recognises ongoing uncertainty around when and how checks are “necessary” under MLR 2017. Firms also reported:
- time and resource pressures (especially smaller firms)
- client reluctance to share financial information
- fee earner nervousness about challenging long-standing clients
Regulatory expectations
The review reinforces that SoF/SoW checks must be meaningful and risk-based. Firms should be able to show:
- clear audit trails
- ongoing monitoring and transaction scrutiny
- enhanced checks where risk is higher
- evidence that AML controls work in practice — not just on paper
Why this matters even more now
With AML supervision expected to move from the SRA to the Financial Conduct Authority (FCA), firms relying on tick-box compliance are likely to face tougher, data-driven scrutiny. The FCA will expect firms to demonstrate real-world effectiveness of policies and controls.
How RACO can help
RACO supports firms with outsourced, practical AML and compliance solutions, including:
- AML risk management and compliance services
- day-to-day COLP/COFA/MLRO support
- outsourced CDD, EDD, and risk assessments
- independent Regulation 21 AML audits
- firm-wide and role-specific AML training
Read the full story here
Act now: If you’d like to talk through the findings or review your current SoF/SoW processes ahead of the FCA transition, we’re happy to help.
The SRA’s 2024-25 Enforcement Data: What It Means If Your Law Firm is Facing an Investigation
The SRA’s latest Anti-Money Laundering Annual Report signals a tougher regulatory climate for law firms. Nearly a third of inspected firms were found non-compliant, enforcement actions have doubled, and total fines reached almost £1.5m. With scrutiny rising and FCA supervision still on the horizon, firms need to understand both the risks and what happens if the SRA comes calling.
Key figures from the SRA report
The annual report shows a sharp increase in activity and sanctions:
- 935 proactive AML engagements — a 72% increase year-on-year (around 1 in 6 firms reviewed).
- Only 13% of inspected firms were fully compliant (down from 22%).
- 32.4% were non-compliant and referred for investigation.
- 151 enforcement actions, almost double the previous year.
- Fines totalled £953,333 from the SRA plus £545,650 from the SDT (nearly £1.5m overall).
Outcomes range from warnings and rebukes to heavy fines, suspensions, and strike-offs and more SDT cases are expected soon.
Common AML failures
The SRA highlights repeat issues it has warned about for years, including:
- Weak or missing client and matter risk assessments (half of non-compliant firms).
- Firm-wide risk assessments not meeting standards (only 47% compliant).
- Source of funds checks missing in 10% of files.
Firms that haven’t fixed these gaps are now facing penalties, not advisory letters.
What happens in an SRA investigation
If a firm is referred, the process typically follows these stages:
- Investigation/enquiry – evidence gathering and statements. Early specialist support is critical.
- Decisions and defence – possible outcomes include no action, warnings, fines, settlement agreements, SDT referral, or (rarely) intervention.
- Mitigation – stopping breaches, fixing systems, and showing regulators the issue is controlled and won’t recur.
- SDT referral and proceedings – formal, adversarial, and public, ending in an agreed outcome or hearing.
The real cost is bigger than the fine
Fines are often the smallest part of the damage. Investigations absorb partner time, disrupt billing, trigger substantial legal costs, may impact PII premiums/renewals, and can cause long-term reputational harm once outcomes become public.
Why early expert advice matters
RACO’s experience shows firms do best when they engage support as soon as they spot a problem, not after an inspection notice or deep into an investigation. Early advice can help with:
- deciding whether and how to self-report (a major mitigation factor if done right)
- preparing consistent, complete responses to the SRA
- SDT representation where risks are highest
Prevention still beats defence
Most of the failures in the annual report are preventable. Firms with robust AML frameworks, meaningful risk assessments, regular audits, and strong training are far less likely to be referred.
How RACO can support
RACO provides specialist help across the full lifecycle of risk and response, including:
- SRA enquiries and investigations support
- self-reporting guidance
- SDT defence support
- ongoing compliance, audits, AML training, and outsourced CDD/risk assessment
What to do now
If the SRA has contacted you, or you’ve identified a potential breach that may require reporting, we can help quickly and practically.
Read the full story here
Take Action Today: If the SRA has contacted you, don’t wait, call our helpline now 0203 985 8550.
What Does a Legal Cashier Actually Do?
A Day in the Life of Hilary at Legal Keepers
Ask someone outside the legal sector what a legal cashier does, and you’ll usually get a polite pause followed by, “Something to do with accounts?” In reality, the role is far deeper, far more regulated, and far more integral to a law firm than most people realise.
To show what the job truly involves, let’s follow Hilary, an experienced legal cashier at Legal Keepers, through a typical working day. (As “typical” as legal cashiering ever gets.)
8:45am — First Coffee and First Checks
Hilary starts her day by opening the client account statements, usually while the first coffee cools just enough to drink. Before most people have found their second brain cell, she’s already scanning for unusual transactions or anything that needs a closer look.
This early check sets the tone for the day: calm, controlled, and fully aligned with compliance.
9:00am — Bank Reconciliations
Once settled, Hilary moves on to reconciling the bank with the ledgers. This isn’t just a routine job — it’s one of the most important parts of legal cashiering, ensuring every figure sits exactly where it should.
She reviews:
- Client account balances
- Ledger postings
- Any variances
- Supporting documents
It’s steady, focused work, and Hilary handles it with the consistency of someone who has done this a thousand times and still cares about getting it right every single day.
10:30am — Processing Payments and Receipts
With the morning admin in good order, Hilary turns to payments and receipts. This is where the SRA Accounts Rules become the backbone of her decision-making.
She processes:
- Client payments
- Office account payments
- Disbursements
- Refunds
- Internal transfers
Each action is carefully documented and authorised. No shortcuts, no assumptions. When you’re handling client money, “almost correct” simply isn’t acceptable.
11:45am — Supporting Fee Earners
Late morning is usually when the questions start. Fee earners often need updates on matters, help with disbursements, or guidance on a financial query.
This part of the role is as much about communication as it is about numbers. Hilary helps translate complex financial processes into clear answers, keeping the whole firm running smoothly.
1:00pm — Lunch: A Reconciliation of Calories
Hilary steps away from her desk for lunch — a chance to reset and, as she likes to describe it, “reconcile calories instead of client accounts.”
It’s a brief pause, but an important one. Even the most precise legal cashier benefits from a mental reset before the afternoon’s work.
2:00pm — Reporting and Month-End Preparation
After lunch, Hilary turns her attention to reporting. These reports help partners and managers understand how the firm is performing financially, and they need to be accurate, timely, and easy to interpret.
Her tasks may include:
- Aged debt analysis
- Client balance reporting
- Disbursement summaries
- VAT preparation
- Month-end reconciliations
These reports are often the basis for strategic decisions, so clarity matters just as much as correctness.
3:30pm — Compliance Review
The afternoon is a good time for a quieter sweep through compliance tasks. Hilary double-checks transfers, reviews client account activity, and ensures that every entry is audit-ready.
This part of the job is less visible but absolutely essential — it’s what keeps the firm aligned with regulations and free from the kinds of issues that tend to appear at the worst possible time.
4:30pm — Final Checks and Problem-Solving
Before the day ends, Hilary deals with outstanding queries, corrects any misallocations, and resolves minor issues that could grow if left unattended.
A missing reference. An unexplained balance. A posting that needs revisiting.
She ties up the loose ends so the next day begins clean and orderly.
5:15pm — End of Day
Hilary closes her laptop with the confidence that comes from knowing the firm’s financial records are accurate, complete, and compliant. Tomorrow will bring new transactions, new queries, and new reconciliations — but for now, everything is where it should be.
Why Legal Cashiers Like Hilary Are Essential
Legal cashiering is more than entering numbers into a system. It requires precision, awareness of financial regulations, strong communication, and a commitment to safeguarding client money.
Legal Keepers provides firms with legal cashiers who bring:
- Consistent accuracy
- Regulatory confidence
- Clear reporting
- Operational support
- Peace of mind
It’s the kind of expertise that keeps firms running smoothly and audits running predictably.
Final Thoughts
Hilary’s day reflects the care and attention that legal cashiering demands — and the value it brings to every law firm. Quietly, consistently, and expertly, legal cashiers like her keep the financial foundations of legal practices strong.
Want a confidential chat? Click here
SCAM ALERTS
Warning: Francis Bill Solicitors LLP claiming to be a law firm
The Scam:
Please be aware of a current scam involving letters sent to members of the public claiming to be from “Francis Bill” at “Francis Bill Solicitors LLP” or “Francis Bill Law.” The letters say there is an unclaimed life insurance policy and ask the recipient to “consent to be in partnership” with Francis Bill to claim the policy and share the payout.
The Solicitors Regulation Authority (SRA) has confirmed that neither the firm names nor an individual called Francis Bill are authorised or regulated by the SRA. The correspondence uses contact details including emails (francisbill@mail.com / info@francisbilllaw.com), a UK mobile number, and London addresses, plus a website, but these are tied to an unregulated, fraudulent operation.
What to do:
If you or a client receive anything like this, do not respond or share personal/financial information. Carry out due diligence by independently verifying any firm or solicitor via trusted contact routes and the SRA register. If in doubt, contact the SRA to confirm whether a firm or individual is legitimately regulated.
Read the full alert here.
Warning: Trademark correspondence misusing the names of genuine individuals and of Agecroft Legal Services Limited
The Scam:
Please be aware of a scam targeting businesses with bogus intellectual property correspondence. The emails misuse the name of Agecroft Legal Services Limited and the identities (including SRA numbers) of two real solicitors, Andrea Lombardo and Amber Sky Jones.
The messages claim that someone has applied for exclusive rights to your company or brand name and urge you to secure trademark registration quickly, offering “assistance” to complete the process. These emails have been sent from addresses such as andrea@tm.agecroftlegalservices.com and amber@notice.agecroftlegalservices.com, and reference a phone number and website that are not connected to any SRA-regulated legal service.
The SRA confirms that, while Agecroft Legal Services Limited is a genuine regulated holding company, it does not provide legal services and has no official phone number, email address, or website. The legitimate firm and the named solicitors have confirmed they have no connection to this correspondence.
What to do:
Do not respond, click links, or share information. If you receive anything like this, independently verify the firm/solicitor via trusted details and the SRA register before taking action. Treat urgent trademark warnings that route you to unfamiliar contacts as highly suspicious.
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
