Solicitors Regulation Authority or SRA is responsible for safeguarding clients’ money. It can take action against the law firms for breaking any rules or regulations. It has developed a Client and Matter Risk Assessment Framework to identify any breach or cases of money laundering. The assessment can also detect risks related to terrorist financing. It is a helpful tool for attorneys because they can understand their clients better before the start of their work.
What is the Importance of Risk Assessment for Legal Firms?
- The risk assessment is a great advantage for an attorney. It helps him decide whether he can work with the client. He also learns what risks are involved in working with such clients.
- The attorney, therefore, can decide the level of monitoring required for the client.
- A legal firm will have the power to investigate each transaction and even the source of the fund.
- Risk assessment determines the level of due diligence towards a client.
How do you carry out the Matter / Client Risk Assessment?
SRA develops a Client or Matter Risk Assessment template for reference. A legal firm can customize it if necessary. Usually, a risk assessment is carried out before the start of the case. A legal firm needs to perform a risk assessment for each case. They might have to submit the documents to SRA if required.
A solicitor or a legal firm must consider the following aspects while running a risk assessment.
- What are the potential uses for this account?
- What will be the level of assets to be deposited by a customer?
- What is the duration of the business relationship?
What Challenges does SRA face with Client or Matter Risk Assessment?
SRA has a list of names of legal firms that need to use the risk assessment template properly. For example, they cannot accurately label the risk as high, medium, or low.
SRA has also identified the legal firms that rely on the templates too much, but the latter needed help to address their issues. Legal firms need to customize the risk assessment template according to their needs so that it can show effective results.
A legal firm must run a Client or Matter Risk Assessment to stop money laundering cases. If it is Otherwise the legal firm will be in danger. Doing a Client or Matter Risk Assessment properly before starting the case would be wise.
To get the template, click the link below.
