Study suggests money laundering poses sizeable threat to solicitors

30 January, 2018

A recent regulatory report suggests that solicitors and law firms have “an important role to play” in identifying money laundering, and in attempting to dispel what is quickly becoming one of the greatest threats to the legal profession.

The Solicitors Regulation Authority’s (SRA) latest annual Risk Outlook report argues that solicitors “cannot afford to be complacent” in the face of this growing issue.

Citing research from the National Risk Assessment of Money Laundering and Terrorist Financing 2017, it warns that the legal sector is facing a “high risk” of being exploited for money laundering purposes.

It adds that known instances of money laundering increased by 10 per cent in 2016 – and appear to be on the rise.

According to the SRA, money is most typically laundered through property transactions and company formations – meaning that any law firms working in these areas are potentially at risk of being targeted.

The regulator has also warned solicitors to be hyper-alert in terms of their own accounts and to diligently supervise the ways in which client money is being used within their organisation.

Paul Philip, the SRA’s Chief Executive, said: “Solicitors have an important role to play and the majority want to do the right thing, but no one can afford to be complacent.

“This is a high risk for the profession and we must all step up to deal with the challenge,” he said.

“Keeping the profession free of money laundering is in everyone’s interest. It means that we can disrupt serious crime – crime that funds everything from terrorists to people traffickers.

The SRA’s report also identified ‘dubious’ investment schemes and cybercrime as other potential risks facing the profession.

At Watson Buckle, our legal sector specialists are experienced in advising solicitors, barristers and legal practices on a range of tax and financial matters. We can support legal practices by ensuring that you are as tax-efficient as possible, which in turn can help you to achieve greater profitability. For more information, please contact us.