Silos, client partners and the risk of fragmented awareness in large law firms

Author, Amy Bell, CEO and Founder of AML Sorted

Large firms often assume that scale and structure provide protection against money laundering risk. In reality, organisational complexity can create blind spots.

In one example, a property development client instructed multiple departments across a firm. There were commercial property transactions, corporate restructuring matters, company secretarial services and litigation files. Deposits were being collected from overseas buyers for developments that had not yet been constructed — and in some instances, the land itself had not yet been acquired.

Early warning signs existed. The apparent owner of the company was, on paper, an employee. Litigation proceedings revealed inconsistencies in ownership claims. An employment dispute contained allegations of fraud. An influential consultant appeared central to communications yet did not formally appear on documentation.

“No single department saw the full picture"

The issue was not incompetence. It was fragmentation. Each team assessed risk within the confines of its own file. The litigation team did not share concerns with the property team. The corporate team did not reassess risk in light of contentious proceedings. There was an assumption that the client partner had visibility across all matters.

In practice, that assumption proved misplaced.

Siloed working structures create a dangerous illusion of security. When information is compartmentalised, patterns remain undetected. Criminal activity frequently spans multiple service lines precisely because complexity obscures scrutiny.

AML compliance in large law firms must therefore extend beyond departmental policies. It requires structured communication channels and coordinated risk governance. Intelligence gathered in contentious matters should inform transactional assessments. Ownership anomalies identified in corporate work should influence property transactions. Risk cannot be confined to one practice area.

Even areas technically outside the formal scope of AML obligations, such as certain litigation matters in some jurisdictions, may reveal critical red flags. Limiting training to designated service teams can leave significant exposure unaddressed. All fee earners should understand how suspicious patterns manifest across a firm.

Scale does not inherently reduce money laundering risk. In some respects, it amplifies it. Effective AML compliance depends on collective awareness. When departments operate in isolation, criminals exploit the gaps between them.

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