Expert advice
📢 NEW WEBINAR: Ask the Auditor – How to prepare for an SRA AML Audit
We're excited to be launching a new series of quarterly Compliance Office webinars, covering different regulatory and compliance topics affecting law firms. And for our first session, we're starting with a topic we know is high on the agenda for many firms – SRA AML audits. What actually happens when the SRA selects your firm for an AML audit? And, perhaps more importantly, how prepared would you be if that notification landed tomorrow? On Tuesday 13 October, 12–1pm, Aj Nahal, former SRA AML Auditor and now Senior Risk & Compliance...
The SRA’s New AI Warning Notice: What Every Law Firm Needs to Know
On 17 August 2026, the SRA published a warning notice on the misuse of AI in legal services (https://www.sra.org.uk/solicitors/guidance/misuse-ai/). Whilst it still leaves more questions than answers, what it does make clear is that blaming AI is not going to be an acceptable excuse. Two things the SRA is worried about: Hallucinations in court documents. AI tools can confidently generate fake cases, fake citations, and fabricated "facts" that look entirely plausible. The SRA has already received reports from senior judges, plus several...
SRA Sectoral Risk Assessment 2026 – What’s new? What next?
The SRA published its latest Anti-money laundering, terrorist financing, proliferation financing and sanctions Sectoral Risk Assessment on 6/8/26 (as it is required to do at regular intervals by the Money Laundering Regulations (MLRs)). Regulation 18 requires firms to take the SRA’s sectoral risk assessment into account when drafting and maintaining their own firm-wide risk assessment (FWRA). Accordingly, firms will be expected to review the SRA’s document and update their FWRA (including any separate sanctions firm wide risk assessment) to...
LSB approves SRA Rule changes on Compliance Roles and Accountants’ Reports
Right direction, but the details will decide whether they work In June, we discussed the SRA consultation on Client money in legal services. The SRA proposed two significant changes. First, the requirement for all firms to submit annual accountants reports, and second, changes to compliance officer arrangements to separate compliance and decision-making roles within law firms. The Legal Services Board (LSB) has now given the green light to those significant SRA rule changes and while the direction of travel is sensible, the practical detail...
Compliance Update July 2026
Welcome to our quarter three risk and compliance update, bringing you the latest practical guidance and regulatory insights… New rules and guidance from SRA SRA Effective Supervision Guidance – updated post-Mazur The SRA finally updated its Effective Supervision Guidance on 12 June following the Court of Appeal's decision in Mazur (expanding it from 9 pages to 24). By way of a reminder, the Court of Appeal concluded that it is lawful for an unauthorised person to carry out work amounting to the ‘conduct of litigation’ under the Legal...
Consultation on new merger or acquisition reporting process
The SRA has announced the launch of a consultation on proposals to require law firms to notify it of prescribed events, including an advance notification of a merger or acquisition which has reached the stage of agreeing Heads of Term or similar. The SRA currently asks firms to notify it of a merger or acquisition within 28 days of the completion of the transaction. A firm which ceases to trade as a result must also notify the SRA of its closure no more than seven days in advance. As part of the SRA’s broader trend towards a more proactive...
Amendments to the Money Laundering Regulations – how will they impact law firms?
You may recall an excitable period last summer where we were promised a “clearer and more proportionate anti-money laundering (AML) regime”, when the government recognised that AML checks were seen as a major burden to law firms? Well, those changes, following the government’s consultation last September, are about to come into force (expected by the end of June). Sadly, they are not as ground-breaking as perhaps some may have hoped. Indeed, the more cynical amongst us may feel they have done the opposite of the stated aim of reducing...
AML supervision reforms – the move to the FCA – the next instalment!
We set out our thoughts on the Government’s consultation on the transfer of Anti-money laundering & counter terrorist-Financing (AML) supervision from the Solicitors Regulation Authority (SRA) (and other legal regulators) to the FCA in December last year (here). HM Treasury (HMT) has now published the response to that consultation (here). For those that had hoped the proposals may be watered down, or disappear altogether, I’m sorry to burst your bubble. Although the resignation of our Prime Minister could have an impact on these reforms,...
Financial Action Task Force (FATF) plenary – latest update to high risk third countries list
Following the Financial Action Task Force (FATF)’s latest plenary session, which concluded on Friday (19/6/26), the lists of high-risk countries have been updated again. As a reminder, the Money Laundering Regulations (MLRs) (still currently) require that Enhanced Due Diligence (EDD) be carried out where clients (and other parties) are established in a high-risk third country (HRTC). The UK’s HRTC list mirrors the FATF lists so it is important to be aware of any changes to the FATF black and grey lists. Although we are expecting amendments to...
SRA Effective Supervision Guidance – updated post-Mazur…finally!
The SRA’s updated Effective supervision – Guidance was finally published on 12th June 2026. This follows the Court of Appeal’s much-heralded ‘conduct of litigation’ judgment in the Mazur case in March (see some of our previous thoughts here). By way of a reminder, the Court of Appeal concluded that it is lawful for an unauthorised person to carry out work amounting to the ‘conduct of litigation’ under the Legal Services Act 2007 (LSA) as long as they are doing so ‘for and on behalf of an authorised individual’ under their genuine and...