The role of compliance professionals in law firms is often ‘misunderstood’ by colleagues, leading to misconceptions and a lack of appreciation for their efforts; which are often undertaken at personal cost to individual mental health and wellbeing.
Just 15% of compliance professionals consider their role to be perceived as ‘critical and valued’ by colleagues which in turn leads to challenges in creating effective compliance cultures, and difficulties in convincing senior leadership teams to further invest.
The statistics are drawn from a recent report published by client due diligence platform Thirdfort, which identifies the average compliance team consists of five staff. Typically compliance professionals are committed to their roles and often work overtime (42% say they work overtime at least once a week to handle AML-related issues) according to the research to ensure their job is done effectively. This can also come at a personal cost with half (49%) saying the pressures of AML compliance negatively impacts their mental health and wellbeing on a weekly basis.
35% of professionals responded to say they found their responsibilities ‘overwhelming’ and 12% said they were ‘completely unmanageable.’ Three quarters of respondents said they anticipated their staffing resource would remain the same or reduce over the next 12 months; with a similar number suggesting their budget would wither remain the same or reduce over the same period.
There is no doubt compliance teams operate in challenging conditions; by most estimates money laundering costs the UK economy some £100bn annually; and a National Audit Office report estimated the UK Government reportedly lost £21bn to fraud between 2020-2022
The survey was conducted across legal, accountancy and estate agency; where each sector was asked about the effectiveness of their AML compliance. 72% of accountancy firm responses were net positive when it came to how effective their processes and procedures were; 64% across estate agency; and 56% in legal.
“The compliance burden on law firms continues to increase. Compliance leaders are doing their best and often going above and beyond to meet these regulatory requirements.”
said Olly Thornton-Berry, co-founder and CEO at Thirdfort
“However, fighting fraud and money laundering shouldn’t require regular overtime and negatively impact your personal life. Since many compliance leaders we surveyed don’t expect budget increases, they must explore other efficiency opportunities. Technology can reduce time spent on client due diligence, allowing compliance leaders to focus on assessing and mitigating risk in more complex cases.”
