Bressler Risk Blog

In this month’s sponsor spotlight, Intapp is inviting law firm risk leaders and practitioners to participate in its Anti-Money Laundering survey: “Benchmark your law firm’s AML and KYC efforts against others in the industry“

• Intapp is conducting a survey designed to uncover how firms manage and track anti-money-laundering (AML) and know-your-client (KYC) efforts. The findings will serve as a benchmark — helping your firm compare, contrast, and evaluate its own AML and KYC efforts against others in the industry.

For more detail on participating: Complete this form to request the survey.

AML Analysis and Advice:

For those looking for additional detail and thought on responding to evolving AML pressures, see this article from Cindy Mundow, Intapp Practice Group Leader, Risk & Compliance, and Yelena Chervinsky, Intapp Director of Risk Consulting: “A single framework for complying with anti-money-laundering (AML) laws across jurisdictions” —

• “Do any of these situations apply to your law firm?
  • Your firm is subject to varying AML and KYC laws across multiple jurisdictions.
  • Your firm practices across some jurisdictions that are subject to AML and KYC laws, and others that are not.
  • Your firm is not yet subject to any AML or KYC laws.”
• “If you fall into the first or second category, your firm should apply a common framework for complying with AML and KYC laws — then add specific steps as needed to address specific regional requirements. Even if your firm is in the third category, it should still consider voluntarily implementing a framework for several reasons.”
• “Below we look at the core elements of an effective AML and KYC compliance framework as well as additional considerations for specific jurisdictions.”
• “Carrying out AML and KYC checks requires a carefully designed process that enables your firm to gather, review, and store the information necessary to undertake checks before deciding whether to accept a new client or matter.”
• “Your AML/KYC workflow is just one part of a broader client onboarding process and workflow that also involves a data quality review, risk assessment, and conflict review.”
• “With a risk-based approach to client due diligence, your firm should adjust the stringency of its AML and KYC reviews based on the level of risk that a client and matter presents. That is, your firm gathers baseline information on each client and assigns a risk score.
  It is important to develop a sound approach and methodology to risk scoring within your firm because the risk scores guide your firm in dividing its time among review tasks. Risk scores enable you to devote the highest levels of review and priority to high-risk or higher-risk rated clients or matters and less time to low-risk matters.”
• See the complete article: here.

SPONSOR SPOTLIGHT:

Intapp cloud-based risk and compliance products have included AI capabilities for many years. If you were unable to join the webinar on March 5, you can discover how Intapp compliance solutions can help you leverage recent and upcoming AI enhancements in the cloud by watching the recording here.

This session covered:

• Key enhancements added to Intapp risk and compliance products in the past year
• A review of current and upcoming AI capabilities
• Recommendations and available resources for your journey to the cloud

Our next sponsor spotlight highlights this article from Yelena Chervinsky, Director of Risk Consulting at Intapp: “How professional service firms can optimize conflict management” —

• “Does your firm’s conflicts process take too long and yield unclear results? After bringing a potential new client to the firm, do you find yourself waiting days or weeks for a decision? And in lieu of a simple decision, do you often only receive a huge, complex report?”
• “Institute a disclosure policy. Your firm should establish a policy mandating that fee earners share comprehensive information about new matters with the Conflicts department or designated conflicts professionals.”
• “Wait until after matter approval to establish new client matter account. This policy ensures alignment with conflict check requirements and prevents opening new client matter billing accounts without proper due diligence and clearance.”
• “Make researching affiliations a part of your conflict check process. Your firm should determine which matters warrant this extensive affiliation research. Make sure to consider the nature of the firm’s representation and the practice area involved. For example, when dealing with bankruptcy or litigation cases, in which conflicts of interest are more common, it’s especially critical to identify your party’s affiliations so that your firm can respond appropriately.”
• “Determine when to exclude closed matters. To maintain the relevance and accuracy of conflict reports, your firm should establish guidelines for excluding and automatically closing old, completed matters. Without such guidelines, inactive client matters may overshadow active ones. This could potentially lead to large volumes of erroneous data in the conflicts database.”
• “Add conflict waiver terms into conflicts database. When clients grant waivers for conflicts of interest, you must integrate the specific conditions of these waivers into your firm’s database.”
• “Routinely circulate updated matter information. Your firm should establish a policy of routinely sharing new, non-confidential client and/or matter information among fee earners to supplement conflict checks. For example, if new parties become involved in the matter, their names should be shared and added to the conflicts database.”
• “Implement AI assistance. AI-assisted conflicts searching offers numerous benefits to firms: It reduces the volume of hits analysts need to review; It displays results in a way that makes them easy to analyze; It removes irrelevant erroneous and ‘false-positive’ results; It provides reasoning for its classifications.”

See the complete article for additional detail and recommendations.

In our May sponsor spotlight, Intapp’s Bryn Bowen echoes a point the ABA + ALM Editorial Board just highlighted — the prudence of enhancing client due diligence: “Why U.S. law firms should voluntarily implement anti-money laundering processes” —

• “When the U.S. Senate blocked the Enablers Act in December 2022, law firms avoided new regulatory requirements to conduct anti-money laundering (AML) checks on clients. But law firms already have compelling reasons to institute AML and Know Your Client (KYC) processes.”
• “Whether your law firm is based in the U.S. exclusively or has offices around the world, implementing AML and KYC processes presents several upsides, helps you avoid significant risks, and is easy to carry out with the right technology.”
• “When you accept a new client, you want to make the full resources of your firm available to them. Thus, if you’re a global law firm, it’s beneficial to onboard U.S.-based clients in a way that enables you to transfer work to overseas offices or to take advantage of advice and services provided by your offices outside of the United States. Even if the client doesn’t anticipate needing the counsel of your lawyers in other countries, best practice recommends keeping the door open to that possibility.”
• “The optimal way to onboard a U.S. client to other offices across the globe is to implement a consistent AML and KYC standard that all firm offices adhere to regardless of whether operating in a regulated or unregulated jurisdiction. Once a firm settles on a standard for all offices, having a consistent process can significantly increase the efficiency of the client onboarding lifecycle and improve the experience of the internal team and client.”
• “Onboarding the client without implementing any kind of AML process would limit the jurisdiction of the work you could undertake for that client. Should the client later have a matter requiring the counsel of your attorneys in other countries, the work would have to await completion of AML checks, causing delays and risking dissatisfaction.”
• “So, how can your firm implement AML and KYC processes? If you’re a strictly U.S.-based law firm, following a voluntary risk-based approach to preventing money laundering, as the American Bar Association recommends, is a sound strategy.”
• “Setting up these checks and verifications involves creating defined workflows and forms as well as enabling cross-checking of data against third-party databases. Because of these complexities, software purpose-built for these processes makes them easier to implement and track.”
• “As the United States works to strengthen its approach to preventing money laundering through the Corporate Transparency Act and its beneficial ownership reporting requirements , law firms have an important self-directed role to play in preventing criminal behavior and its devastating social, economic, and security consequences.”
• Read More

In our April sponsor spotlight, Intapp is highlighting a the recording of its earlier webinar panel on managing client engagement terms: “VIDEO: Getting Started (or Getting Serious) with Software-driven OCG and Terms Management” —

Event description:

• Law firms know that outside counsel guidelines (OCGs) are only going to increase in volume and complexity in the future — and firms will need to adopt modern tools, policies, and best practices to effectively manage those mandates.
• Although moving away from legacy processes and technology can prove challenging for some firms, the benefits of modern OCG management tools are invaluable and can help organizations reach lasting success. That’s why many firms continue to invest in Intapp Terms.
• Intapp Terms enables firms to effectively catalog, analyze, and comply with client mandates at scale.
• In this webinar, a panel of independent experts will share their experiences, advice, recommendations, and tips for navigating your Intapp Terms journey — no matter what stage your firm is at.
• Whether you’ve licensed Intapp Terms and are looking to take your practices to the next level, or you’re just starting to think about a software investment, this session will help you better prepare for your organization’s long-term success. Bring your stories, questions, and ideas to the table, and learn how you can better manage client requirements.

This webinar covered topics, including:

• Strategies for getting started — Discover how prudent planning, expert assessment, and practice polices can put you in the best starting position.
• Stories of scaling — Learn how firms are using Intapp Terms to effectively centralize and streamline OCG management.
• Harnessing new horizons — Achieve active compliance across time and billing activity, and delve into data and analytics, new features, and emerging opportunities.

Speakers:

• Eric Mosca, Director, InOutsource
• David Skweres, Director, InOutsource
• James Edwards, Director of Client Experience, Intapp
• Martin Armstrong, Senior Product Manager, Terms, Intapp

Watch the Full Video Here.

In this month’s sponsor spotlight, Intapp is highlighting a the recording of its recent webinar panel on managing client terms of engagement: “VIDEO: Getting Started (or Getting Serious) with Software-driven OCG and Terms Management” —

Event description:

• Law firms know that outside counsel guidelines (OCGs) are only going to increase in volume and complexity in the future — and firms will need to adopt modern tools, policies, and best practices to effectively manage those mandates.
• Although moving away from legacy processes and technology can prove challenging for some firms, the benefits of modern OCG management tools are invaluable and can help organizations reach lasting success. That’s why many firms continue to invest in Intapp Terms.
• Intapp Terms enables firms to effectively catalog, analyze, and comply with client mandates at scale.
• In this webinar, a panel of independent experts will share their experiences, advice, recommendations, and tips for navigating your Intapp Terms journey — no matter what stage your firm is at.
• Whether you’ve licensed Intapp Terms and are looking to take your practices to the next level, or you’re just starting to think about a software investment, this session will help you better prepare for your organization’s long-term success. Bring your stories, questions, and ideas to the table, and learn how you can better manage client requirements.

This webinar covered topics, including:

• Strategies for getting started — Discover how prudent planning, expert assessment, and practice polices can put you in the best starting position.
• Stories of scaling — Learn how firms are using Intapp Terms to effectively centralize and streamline OCG management.
• Harnessing new horizons — Achieve active compliance across time and billing activity, and delve into data and analytics, new features, and emerging opportunities.

Speakers:

• Eric Mosca, Director, InOutsource
• David Skweres, Director, InOutsource
• James Edwards, Director of Client Experience, Intapp
• Martin Armstrong, Senior Product Manager, Terms, Intapp

Watch the Full Video Here.

In this month’s sponsor spotlight, Intapp is highlighting an upcoming event sure to be of interest to every firm looking to get a better handle on managing client terms of engagement: “WEBINAR: Getting Started (or Getting Serious) with Software-driven OCG and Terms Management” —

Event description:

• Law firms know that outside counsel guidelines (OCGs) are only going to increase in volume and complexity in the future — and firms will need to adopt modern tools, policies, and best practices to effectively manage those mandates.
• Although moving away from legacy processes and technology can prove challenging for some firms, the benefits of modern OCG management tools are invaluable and can help organizations reach lasting success. That’s why many firms continue to invest in Intapp Terms.
• Intapp Terms enables firms to effectively catalog, analyze, and comply with client mandates at scale.
• In this webinar, a panel of independent experts will share their experiences, advice, recommendations, and tips for navigating your Intapp Terms journey — no matter what stage your firm is at.
• Whether you’ve licensed Intapp Terms and are looking to take your practices to the next level, or you’re just starting to think about a software investment, this session will help you better prepare for your organization’s long-term success. Bring your stories, questions, and ideas to the table, and learn how you can better manage client requirements.

This webinar will cover various topics, including:

• Strategies for getting started — Discover how prudent planning, expert assessment, and practice polices can put you in the best starting position.
• Stories of scaling — Learn how firms are using Intapp Terms to effectively centralize and streamline OCG management.
• Harnessing new horizons — Achieve active compliance across time and billing activity, and delve into data and analytics, new features, and emerging opportunities.

Speakers:

• Eric Mosca, Director, InOutsource
• David Skweres, Director, InOutsource
• James Edwards, Director of Client Experience, Intapp
• Martin Armstrong, Senior Product Manager, Terms, Intapp

Learn More and Register Here.

In this month’s sponsor spotlight, Intapp highlights recent analysis and advice from Bryn Bowen, Practice Group Leader, Legal Risk: “Improve legal risk management and compliance: How midsize law firms can continue to thrive in a post-pandemic market” —

• “During the last year, midsize law firms have increased demand, maintained productivity, and experienced lower turnover overall than small and large firms.”
• “Risk and compliance, for example, remains a complex area that firm leaders struggle to properly address. Oftentimes, midsize firms lack the resources to properly manage compliance for the numerous matters they work on, while a general lack of knowledge around the evolving best practices for due diligence increases the risk of accepting unfavorable clients.”
• “The American Bar Association (ABA) also amended Comment 8 to Model Rule 1.1, which now requires that lawyers keep abreast with the capabilities of available technology and ensure its use will properly serve their clients; furthermore, lawyers must be competent in actually using that technology, and must ensure compliance with all other ethical responsibilities. By failing to implement or properly use suitable available technology, lawyers put their clients’ data at risk and may unintentionally run afoul of the ethics guidelines.”
• “Many midsize firms want risk and compliance tools that are equal or superior to those used by larger firms, and that will provide the same qualitative analysis and protection that large firms often enjoy.”
• “OnePlace Risk & Compliance, a cloud-based and AI-powered Intapp suite, can help your firm improve conflicts clearance, mitigate risk, and ensure compliance throughout the client lifecycle. Like all Intapp products, OnePlace Risk & Compliance was designed by experts who have a deep understanding of the unique characteristics, complexities, and challenges of midsize law firms. Clients can count on Intapp technology to meet their specific needs that other generic solutions fail to address.”
• “Throughout their lifetime, these tools can substantially reduce the need for non-knowledge work associated with admin processes, and by largely automating administrative tasks such as new business intake, your firm can onboard clients and accept new engagements more quickly. Additionally, by leveraging advanced AI-powered tools, your firm can reduce the risk of human error and better determine which clients and matters are problematic or profitable.”
• “Midsize law firms need to examine the lifecycle of all their work and ensure that all standards and requirements are continually being met. Properly equipped with the right software, your firm can successfully and efficiently manage risk and compliance throughout every stage of the client relationship lifecycle to improve the overall performance of your firm.”

For more detail, see the complete blog post.

In this month’s sponsor spotlight, Nigel Riley, Intapp’s general manager for risk and compliance solutions, reminds us to pay close attention to the unfolding enhancements Congress is making to AML rules. His article reviews details of the impending changes, and offers advice on how to prepare sound response strategies: “ENABLERS Act: Enhance your risk and compliance management” —

• “For years, experts have warned professional service firms in the U.S. that they need to start preparing for money laundering regulations. And in recent months, those warnings have become impossible to ignore.”
• “The latest and loudest alert came in July 2022, when the U.S. House of Representatives proposed the Establishing New Authorities for Businesses Laundering and Enabling Risks to Security (ENABLERS) Act. This bipartisan legislation, aimed at so-called gatekeepers, would expand anti-money laundering (AML) surveillance — currently required of financial institutions — to professional services firms, requiring accounting and law firms to collect, monitor, and report specific types of client information.”
• “Passage of the ENABLERS Act is not guaranteed. It’s currently an amendment to the National Defense Authorization Act (NDAA), which observers expect congress to vote on by December. It could undergo significant changes prior to the final vote, or not pass at all this year.”
• “My advice to firm leaders is simple:
  • Don’t delay. Proactively prepare by enhancing your KYC and AML processes.
  • Focus on the long-term. Augmenting your firm’s risk and compliance programs can have ongoing, positive impacts on other aspects of your business.”
• “Firms will have to find their own path, but they can get there by focusing on three key areas:
  • Process — Now is the time to thoroughly review current policies and practices, including overall governance framework and risk and compliance protocols for assessing risks associated with accepting new clients and engagements, clearing conflicts, onboarding new business, monitoring engagement performance, and managing client relationships. You can also map out a plan for review and conduct a gap analysis against the newly proposed requirements.
  • People — The risk and compliance team shouldn’t be the only function to prepare for the new regulatory requirements. Instead, a cross-functional evaluation of the client lifecycle and all touchpoints provides a better approach to comprehensively assessing your firm’s current risks, capabilities, and staffing needs. Enhancing team resources, upskilling staff, and identifying inefficiencies can create additional capacity to satisfy the new requirements and allow staff to allocate more time to higher-value work and analysis.
  • Technology — It’s critical to determine if your firm’s current software is optimal enough to support more robust tracking, greater amounts of data, and enhanced reporting as required by the proposed legislation. Take this opportunity to reconsider the software tools currently in use at your firm, evaluate paper-based or manual processes, and identify areas prone to human error where automation and systems integration could mitigate risks and make adopting new regulations easier.”
• “As my colleague and risk management expert Meg Block notes, preparing for the requirements of the ENABLERS Act will require firms to review client onboarding procedures and create additional mechanisms for ongoing monitoring throughout the client lifecycle. This process could create long-term benefits.”
• “Whether or not the ENABLERS Act passes this year, the message is clear: Professional services firms need to prepare for AML regulatory requirements. By starting now, firms can better understand how the regulations may affect them and where they need to focus.”

For more detail, see the complete blog post.