AML reform is live. Is your law firm ready?

The countdown is over. As of 1 July 2026, law firms providing designated services are regulated entities under Australia's anti-money laundering and counter-terrorism financing (AML/CTF) regime. The "Tranche 2" reforms discussed for years are now in force, and AUSTRAC's expectations apply to legal practices much the way they have long applied to banks.

For most firms, the immediate scramble (enrolling with AUSTRAC and standing up an AML/CTF program) is done or nearly done. Now the question is what comes next?

Enrolling is only the first step. Once your firm is enrolled, you still have to run a set of compliance processes on every relevant client and every matter, indefinitely, long after the AML/CTF program itself is written and filed.

Here's how to stay compliant under the new regime once the deadline has passed.

What your ongoing responsibilities are

Regulated legal practices need to identify and verify their clients, understand the purpose of the matter, assess and document money-laundering risk, monitor client relationships over time, and report suspicious matters to AUSTRAC. Each of these is an ongoing obligation, not a one-off check at the point of engagement.

The difficulty for law firms is that these requirements land on top of work fee-earners are already doing. Client due diligence competes with billable time. Risk assessments get rushed or skipped under deadline pressure. Records sit across email, shared drives and people's heads rather than in one place. All of which will cause headaches at audit time.

Why a manual approach won't hold

Plenty of firms will try to meet their obligations with spreadsheets, PDF forms and good intentions. These duct tape solutions can work for a while, until the process breaks at exactly the wrong moment: when a file is requested, when a staff member leaves, or when volume picks up and the process that depended on one diligent person quietly stops happening.

The firms that will find this transition manageable are the ones treating AML as part of how they open and run client work. That means collecting the right information from the client up front, verifying identity without a string of back-and-forth emails, producing a risk assessment that is consistent across the firm, and keeping a clear record of every decision and the reasoning behind it.

Building compliance into the work

Legl was built to solve your compliance challenges in a streamlined and automated way.

By using Legl, your firm gets a single client lifecycle platform covering client onboarding, identity and document collection, customer due diligence, risk assessment and ongoing monitoring, with payments and e-signature in the same place.

For a firm adjusting to the new regime, that means the AML steps your obligations now require become part of opening a matter rather than a separate task someone has to remember.

Clients complete their onboarding in a simple digital process, identity checks run automatically in the background and risk assessments follow a consistent template the whole firm uses. Every step is logged, so if AUSTRAC ever asks, the answer is a few clicks away rather than a frantic search.

Firms already using Legl in the UK, where similar obligations have applied for years, have found that the difference between a painful compliance burden and a smooth one usually comes down to one thing: whether the process is built into client work or bolted on beside it.

The window to get this right

The deadline has passed, but firms that treat 1 July as the start of the work rather than the end of it will be in a far stronger position. Regulators tend to be patient with practices that can show a genuine, consistent process, and far less patient with those that cannot.

If your firm is still relying on manual checks and scattered records, now is the time to put a proper system in place, before volume or a regulator's request exposes the gaps.

Legl works with law firms to make AML compliance faster, more consistent and easier to defend. To see how it could work for your firm, visit legl.com.

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