Law firms handle large sums of money and make attractive targets to criminals wishing to sanitise their criminal proceeds.

There is evidence that the legal sector has particular vulnerabilities that criminals seek to exploit in order to launder money.

There is no single default sign that money laundering is taking place, but the Financial Action Task Force has identified the key ways that criminals launder money through law firms as: misuse of the client account; property purchases; creation and management of companies and trusts; managing client affairs and making introductions; litigation. ‘Knowing your customer’ and conducting appropriate customer due diligence is set to become increasingly business critical for law firms.

The integrity of the legal and financial services marketplace depends heavily on the perception that they function within a framework of high legal, professional and ethical standards. Law firms and insurers build their businesses around their reputation for integrity. Learn more about how to conduct appropriate customer due diligence.