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Underestimating the scope, over-reliance on tech and siloing compliance are areas firms must be aware of.
A leading expert in anti-money laundering and counter-terrorism financing (AML/CTF) for the legal profession has warned firms to act now on incoming reforms, rather than waiting for the final rules to drop.
Jamie Lynch, head of AML at Gilbert & Tobin, said many firms saw and still see AML/CTF as a paperwork exercise rather than a “line-of-sight risk discipline”.
As such, he sees three blind spots show up repeatedly – the first being underestimating the scope.
“Partners often assume only trust account transactions matter, overlooking advisory work that can facilitate movement of value or ownership,” he said.
The second blind spot is over-reliance on technology.
“A screening tool does not replace professional scepticism or the value of fully scrutinising the work you are doing in light of the client structure,” he said.
The third is treating AML as a “compliance silo”. Lynch cites the early days of the regulations in New Zealand as a good example of what can go wrong with this approach.
“We saw firms outsource the thinking to vendors or an under-resourced and invisible compliance officer, then struggle when auditors asked ‘why are you doing this and is it proportionate to your risk profile?’,” he said.
Lynch is just one of an incredible expert speaker line-up at AML Edge 2025, which is holding its second edition event on Tuesday, 21 October, at Watersedge, Sydney.
Top priorities
To avoid these blind spots, Lynch said to start with risk assessment.
“Map practice areas, delivery channels, client profiles and geographic exposures. If you cannot explain where your highest inherent risk sits, every downstream control will be guesswork,” he said.
From there, firms also need to think about risk assessment and ownership, which includes board-level policy, a named compliance officer, and clear reporting lines.
“Regulators look for accountability before they look at checklists,” Lynch said.
To ensure this is carried across the firm, he said to use training that sticks, such as scenario-based workshops.
“In Auckland, we role-played a property deal involving a high-risk trust; the penny dropped faster than with any slide deck,” he said.
Then, he recommends a strong data and records backbone.
“Decide where KYC documents, risk ratings, and ongoing monitoring notes will live. Retrofitting data architecture after go-live is painful,” he said.
Finally, there are clients. This includes having a client due diligence playbook.
“Draft practical, matter-specific procedures with worked examples so fee earners know when standard, enhanced or simplified client due diligence applies,” Lynch said.
He said to talk to clients to let them know what you’re doing and how it will affect them.
“Consider identifying your 10 biggest clients and working with them to begin to collect CDD information to road test your approach,” he said.
His final message for firms is not to wait for the rules to commence but to conduct proper risk assessments now.
“You know your clients, you know your work, and you know your business. Document that knowledge and use it as a road map to stand up a pilot workflow in one practice group within the next 90 days,” Lynch said
“Learn from real files and past issues, then scale. Nothing beats production data for flushing out blind spots.”
At AML Edge 2025, 2nd Edition, Lynch will unpack these lessons in detail in the dedicated Legal Track and showcase practical tools any firm can adopt within weeks.
“The aim is simple: turn regulatory readiness into a reputational edge that attracts clients and talent alike,” he said.
Visit www.amledge.com.au to learn more and secure your earlybird ticket.
