This is the first in a three-part series reflecting on the key themes that surfaced during Elite’s Vantage Sydney event. Over the coming posts, I’ll be exploring the critical compliance, cost, and value conversations that are shaping legal tech decisions for law firms today.
I’m starting with AML compliance - a topic that’s front of mind for many Australian firms as they prepare for long-overdue regulatory changes. During the customer panel discussion at Vantage Sydney, AML was also a key focus for the three firms represented. While SaaS adoption and AI are transforming legal tech, compliance remains a non-negotiable priority - one that firms must integrate into their new business intake and client onboarding processes. So, if you’ve been avoiding those compliance emails, now might be the time to stop moving them to the junk folder and start paying attention…
AML Compliance is Here - What Firms Need to Know
After years of discussions, the Australian government has finally committed to introducing anti-money laundering (AML) and counter-terrorism financing (CTF) laws that will, for the first time, apply to the legal profession in Australia. The Anti-Money Laundering and Counter-Terrorism Financing Amendment Bill 2024 was passed by Parliament on 29 November 2024 and received Royal Assent on 10 December 2024. So, no more dodging this compliance bullet!
These new obligations will come into effect on 1 July 2026, requiring law firms to adhere to a comprehensive set of compliance measures designed to prevent their services from being used to facilitate financial crime. To get ahead of these changes, firms must enrol with the Australian Transaction Reports and Analysis Centre (AUSTRAC) by 29 July 2026 - 28 days after the commencement of the new laws. If human nature comes into play, as it usually does, we can expect a last-minute scramble to meet the deadline!
Meanwhile, across the Tasman, New Zealand firms are watching on without concern - they’ve already been through this process and, for the most part, have adapted well. While there were some initial challenges, many firms found that AML compliance wasn’t just about ticking regulatory boxes - it became an opportunity to improve business processes, reduce risk, and create a more structured, efficient approach to client onboarding. Turns out, there’s a small silver lining to all that paperwork.
What Firms Will Need to Do
For most Australian firms, AML won’t require a complete systems overhaul, but it will change how they take on new clients and matters. The days of a lawyer simply asking their assistant to open a new matter after a quick phone call are over. Firms will now need to follow a structured, documented process that ensures compliance. No more opening files with a “she’ll be right mate” - it’s all about documentation now.
So what does it actually mean? At a high level, this involves:
Verifying client identities - Firms must confirm the identity of all clients using reliable and independent documentation before legal services commence. Yes, this means actually checking those ID documents instead of filing them under “deal with later.”
Assessing risk levels - Every new client and matter must go through a risk assessment to determine whether there’s a higher likelihood of money laundering or suspicious activity. Essentially, you need to know if that “offshore investment consultant” is really just your mate Steve in a Hawaiian shirt.
Keeping detailed records - Firms are required to store records of all due diligence, risk assessments, and client verification checks. While the exact retention period is still being finalised, it’s expected to be at least seven years.
Reporting suspicious activity - If a firm identifies a transaction or client behaviour that raises red flags, they must report it to AUSTRAC for further investigation. So, if that new client insists on paying in unmarked $100 notes, it’s probably time to make a call.
How Firms Can Approach AML Compliance
Based on what I’ve seen firsthand in New Zealand, this all seems a lot more involved than it actually is. Sure, you need to do more due diligence, but shouldn’t you have been verifying your clients already?
There’s no one-size-fits-all approach to AML compliance, and firms will need to determine the best strategy based on their resources and risk profile.
Outsource AML Compliance
One of the simplest ways to be compliant is to outsource your AML checks to a third-party provider, such as FirstAML. Their Source platform offers an all-in-one self-service solution that allows firms to manage as much or as little of the AML process as they want. From identity verification and risk assessments to document collection, ongoing monitoring, and audit-ready record-keeping, Source covers all bases.
Firms can opt for a fully managed AML solution, where FirstAML takes care of everything, or leverage the self-service platform to handle specific parts of the process internally. This flexibility makes it easier for firms to integrate AML compliance without overhauling existing workflows or dedicating significant in-house resources. The ability to choose between full outsourcing and a self-service approach ensures that firms of all sizes can streamline their AML efforts efficiently, reducing administrative burdens while maintaining compliance standards.
Manage AML In-House For some law firms, managing AML compliance in-house can be a more appealing option. This approach allows firms to leverage their existing risk and compliance teams, integrating AML checks directly into their workflows. The benefits include greater control over sensitive information and a deeper internal understanding of AML obligations. However, it requires robust processes, dedicated resources, and ongoing training to be effective.
Key Considerations for Managing AML In-House:
Building a Dedicated Compliance Team - Establishing a team focused on AML compliance is essential. This team should handle client due diligence, risk assessments, and reporting. For smaller firms, this might mean assigning an existing compliance officer to take on AML responsibilities.
Integrating AML Checks - Effective in-house AML management depends on seamless integration of compliance checks into the firm’s current systems. Choosing software that supports integration with practice management systems can significantly reduce the administrative burden.
Training and Awareness - Regular training is critical to ensure all staff understand the firm’s AML obligations. A mix of online training modules and in-person workshops can help keep compliance knowledge current.
Leveraging Technology - Automation tools can streamline in-house AML efforts by simplifying ID verification and risk assessments. Investing in compliance software that supports automated checks can reduce manual workloads and improve accuracy.
Integrating AML Without Disrupting Your Firm
One of the biggest concerns I hear from firms is whether they’ll need to replace their existing systems to comply with AML requirements. The good news... You don’t need to rip out and replace everything. Most modern practice management and document management systems can be integrated with external AML solutions.
With the right setup:
AML checks can run in the background - updating matter statuses once verification is complete.
Client due diligence documents and risk assessments can be stored automatically in the firm’s DMS.
Custom AML audit reports can be generated with a few clicks, ensuring firms are always audit-ready.
So, while AML compliance might seem daunting, it doesn’t have to be a full-scale renovation - more like a tidy-up of the compliance corner.
A Practical and Manageable Change
At first glance, AML compliance may seem like just another regulatory burden, but in reality, it’s about formalising and documenting processes that many firms already follow. Yes, there will be an adjustment period, but firms that take a proactive approach can implement these changes smoothly.
And if the New Zealand experience is anything to go by, firms that embrace AML compliance don’t just stay on the right side of regulation - they benefit from a more structured, efficient onboarding routine. Rather than seeing AML as just more red tape, think of it as an opportunity to tidy up your onboarding process.
Ultimately, AML compliance isn’t just about keeping regulators happy; it’s about protecting your firm’s reputation, safeguarding client relationships, and reinforcing trust in a world that demands transparency. Law firms that rise to the challenge won’t just survive these new obligations - they’ll thrive, turning compliance into a competitive advantage.
So, as the compliance countdown continues, the question isn’t whether you’ll meet the deadline - it’s whether you’ll use this opportunity to build a stronger, more resilient practice. The time to act is now.
Your Opinion
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I still don't understand the implications
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Next Up in This Series…
AML is just one piece of the puzzle when it comes to how firms are navigating compliance, cost, and long-term value in legal tech.
In my next post, I’ll be diving into the true cost of SaaS - breaking down what firms really need to consider when evaluating cloud-based legal tech solutions and why total cost of ownership (TCO) matters more than the subscription fee.
Stay tuned!
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