Which types of legal work are regulated for AML?

The types of legal work regulated for AML are set out in the Money Laundering Regulations 2017 (as amended) (MLRs), which define them as independent legal professionals who:

“by way of business provides legal or notarial services to other persons, when participating in financial or real property transactions concerning—

(a) the buying and selling of real property or business entities;

(b) the managing of client money, securities or other assets;

(c) the opening or management of bank, savings or securities accounts;

(d) the organisation of contributions necessary for the creation, operation or management of companies; or 

(e) the creation, operation or management of trusts, companies, foundations or similar structures,

and, for this purpose, a person participates in a transaction by assisting in the planning or execution of the transaction or otherwise acting for or on behalf of a client in the transaction.”

Not every legal service falls inside this scope. But the areas that do are those that carry a risk of being used to move, disguise or legitimise criminal property. 

Why some legal services are regulated and others are not

The MLRs apply to services where the risks are inherently higher because they involve handling money, moving ownership, creating structures or managing client funds. 

The SRA and LSAG both emphasise that legal services linked to property, corporate vehicles, trust arrangements and client money sit at the centre of this risk. 

These areas remain high risk in the National Risk Assessment of money laundering and terrorist financing 2025 (NRA), particularly when cross-border elements or high-value assets are involved.

The common theme is opportunity. Criminals use professional advisers because they add credibility. 

Your role as a regulated legal professional is to recognise whether your work carries that exposure and to take appropriate action.

Conveyancing and property work

Conveyancing is consistently one of the highest-risk legal activities for money laundering. Large sums move quickly, ownership can be layered, and transactions often involve intermediaries or overseas parties.

The 2025 updates to the NRA highlight conveyancing and high-value residential property work as a primary risk area for criminal funds entering the UK: “Conveyancers who deal with prime or super-prime property purchases are more likely to be exposed to higher risk persons such as PEPs, and overseas buyers where it may be more difficult to assess source of wealth.”

Company formation and trust creation

Any service that creates or manages a structure which can obscure ownership is within scope. Criminals continue to exploit corporate vehicles to hide beneficial ownership and move funds across borders. Legal services in scope include:

• Company formation
• Trust creation
• Nominee arrangements
• Registered office services
• Beneficial ownership structuring

The 2025 NRA notes: “The money laundering risk for TCSPs remains high, with the risk of terrorist financing increasing from low to medium risk. The key vulnerabilities are source of funds and verifying a client’s identity.”

Managing client money

If you manage client money or operate client accounts, you fall squarely within scope. Misuse of client accounts remains a major concern for supervisors, especially where funds move through multiple parties or jurisdictions. 

This includes:

• Holding purchase monies
• Receiving or sending funds on behalf of clients
• Handling damages, settlement proceeds or estate funds
• Managing financier or investor funds linked to a legal matter

The 2025 NRA explicitly warns that client accounts continue to be exploited for layering and movement of illicit funds: “Client accounts… remain highly attractive. Criminals exploit the credibility of a law firm’s banking arrangements to move illicit money.”

Transactional and advisory work involving funds or assets

You are also within scope when providing services that involve:

• Setting up or managing complex ownership arrangements
• Handling high-risk cross-border transactions
• Providing advice that enables the movement or structuring of funds
• Working on matters involving high-risk jurisdictions or politically exposed persons

Even when you are not directly handling the money, if your work enables the movement or structuring of assets you may fall under the MLRs.

Which services are usually out of scope?

Some legal services do not fall under the MLRs. These typically include:

• Litigation
• Employment law
• Family law (unless handling funds through a client account)
• Criminal defence work
• General advisory services with no transactional element

Even when a matter is out of scope for AML, the Proceeds of Crime Act 2002 still applies, so suspicious activity still needs to be escalated internally.

Risk factors that elevate matters for regulated legal work

In the regulated areas, the level of risk varies. LSAG guidance and the 2025 NRA both highlight circumstances which increase risk. For example when:

• A matter involves overseas clients or jurisdictions with weak AML controls
• A property transaction is high-value or involves complex sourcing of funds
• A company or trust structure includes multiple ownership layers
• A client is reluctant to provide documentation
• The transaction lacks an obvious commercial purpose

In higher-risk circumstances, you may need to verify the source of funds and, where relevant, the wider source of wealth to ensure the explanation is plausible and evidenced.

Final thoughts

If you work in property, company formation, trust creation or client account management, clients expect you to safeguard their interests and guide them through high-value or complex transactions. That trust is exactly why criminals target the profession.

The MLRs are designed to protect you as much as they protect the system. Good AML isn’t about adding friction. It’s about protecting your reputation, your clients and the integrity of your practice.