Client inception 2019—law firms

The following Practice Compliance practice note provides comprehensive and up to date legal information covering:

  • Client inception 2019—law firms
  • Preliminary details
  • Identifying the client
  • Persons acting on behalf of clients (individual clients)
  • Recording client details
  • Conflict in relation to the client
  • Client risk rating
  • Crime prevention—new clients
  • CDD under the MLR 2017
  • Clients source of wealth
  • More...

Client inception 2019—law firms

Client and matter inception is an important exercise in protecting your firm, getting to know your client and what they need from you, and complying with a number of different regulatory obligations.

This Practice Note reflects draft Legal Sector Affinity Group (LSAG) AML Guidance, published on 20 January 2021. It awaits HM Treasury approval. Note that any content may be amended before the final version is published with the Treasury’s approval. It also summarises relevant requirements under the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLR 2017), SI 2017/692.

If you are dealing with a new client, inception is a two-stage process:

  1. stage 1—client inception (covered by this Practice Note)

  2. stage 2—matter inception (see Practice Note: Matter inception 2019—law firms)

In reality, you’re likely to do both steps at the same time.

Generally, if you are dealing with a new matter for an existing client, stage 1 will already have been completed and you can concentrate on stage 2—see Practice Note: Matter inception 2019—law firms. AML Guidance for the Legal Sector suggests you should consider reviewing (although not necessarily redoing) the client due diligence (CDD) upon each new matter. Where there has been a significant gap between instructions (anything above a year may be considered a significant gap in relation to high-risk clients or transactions), you should consider

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