Common AML Pitfalls and How to Avoid Them

With new anti-money laundering obligations commencing for Australian solicitors from 1 July 2026, now is the time to understand common mistakes that can trip up even well-intentioned legal practices. The Anti-Money Laundering and Counter-Terrorism Financing Amendment Act 2024 brings sweeping changes, particularly if you provide property conveyancing, corporate services, or Trust management.

Here are several pitfalls to be aware of:

1: Misunderstanding Which Services Are Covered
One of the biggest mistakes solicitors make is assuming the new obligations do not apply to their practice. The reforms capture "designated services" including property conveyancing, managing corporate or Trust transactions, and receiving client money.

How to avoid it: If you provide these services, you'll be a "reporting entity" and must register with AUSTRAC by 31 March 2026. For more details, read our guide on designated legal matters.

2: Inadequate Customer Due Diligence
Customer Due Diligence (CDD) means verifying client identities, understanding financial backgrounds, and assessing transaction risks. For high-risk clients, such as politically exposed persons (people who hold prominent public positions), enhanced due diligence is mandatory.

How SILQ can help: Due to go live in March 2026, SILQ clients can access:

• • Enhanced KYC capabilities that streamline client due diligence with integrated verification and risk assessment
  • Client Matter Cards for comprehensive matter management that tracks all AML compliance information
    

SILQ integrates with APLYiD, an AML platform with proven experience supporting legal practices in the UK and New Zealand.

3: Failing to Recognise Suspicious Activity
Warning signs include unusually secretive clients, the use of complex corporate structures without clear reasons, or the making of large cash payments.

How to avoid it: Train staff to spot suspicious behaviour and file Suspicious Matter Reports with AUSTRAC promptly. The threshold is suspicion, not proof. AML Assist offers training designed for senior managers, compliance teams, and wider staff.

4: Poor Record-Keeping
Lawyers must retain client due diligence and transaction records for seven years.

How to avoid it: Establish digital record-keeping systems now. SILQ automates this process, linking verification documents to matter files. SILQ's Client Matter Cards provide centralised storage for all AML documentation throughout the retention period. SILQ’s AML compliance guide for small legal practices may assist here. 

5: Lack of Governance and Oversight
Without oversight, compliance becomes fragmented and inconsistent.

How to avoid it: Designate AML/CTF compliance officers with specialised training. If you're looking for specialist support, turn to consultancies like AML Assist for tailored compliance support and training designed for legal practices.

6: Waiting Until the Last Minute
Implementing AML systems takes time — updating procedures, training staff, and developing frameworks can't be rushed.

How to avoid it: Start now. AUSTRAC and law societies offer free resources. You can also prepare with AML Assist, which brings proven experience from New Zealand. Enrolment opens from 31 March 2026, allowing practices to prepare well before 1 July 2026.

Moving Forward

Implementing proper systems requires planning, but it will help prevent you from unknowingly facilitating financial crime.

Make the most of the available preparation time. Connect with your law society, attend training, and learn from colleagues. By understanding these pitfalls and acting now, you'll position your practice for a smooth transition and continue providing excellent service to clients.

SILQ can help. With our AML feature due for release in March 2026, this aligns well with achieving your AML obligations. Book a free demo now so you’re ready for the changes ahead.

About SILQ

SILQ has been a leading legal software provider since 2002, offering flexible pricing with month-by-month billing and no lock-in contracts to both solicitors and barristers. SILQ is the only browser-based Legal Practice Management software that offers Australian based phone and email support.