Why client onboarding for law firms deserves its own attention
Onboarding sits between winning an instruction and starting the work, and it is easy to treat it as paperwork. Clients do not see it that way. It is their first real experience of the firm: how many forms they fill in, how often they are asked for the same thing, and whether anyone tells them what is going on. For the firm, it is where compliance obligations meet a client who is keen to get started. Doing it well protects both.
Identity verification: what good looks like
Firms verify a client's identity before acting, and the depth of checking depends on the firm's own risk assessment of the client and the matter. The detail of what is required is set out in current anti-money laundering guidance for the legal sector, which firms should read in its current form. Whatever the level of checking, good identity verification tends to share the same qualities.
- It is quick for the client. A digital check the client completes on their own phone, in minutes, is easier than posting documents or visiting the office.
- It is consistent. Every client goes through the same process for the same type of matter, so nothing depends on who opened the file.
- It is recorded. The outcome, the date and any follow-up are kept on the matter, where a supervisor or the compliance team can find them.
- It escalates clearly. When a check does not pass cleanly, the right person is told and the matter does not move on until they have decided what to do.
Source of funds: Open Banking against bank statements
Where money is coming into a matter, firms generally need to understand where it comes from. Traditionally that has meant asking clients for bank statements, then reading through them by hand. It works, but it is slow, clients often send the wrong pages, and statements are easy to lose track of in a mailbox.
Open Banking offers another route. With the client's consent, the firm receives account information directly from the client's bank, which can be easier to work from than a scanned statement and spares the client from finding and sending documents. It does not remove the need for judgement: someone at the firm still reviews what comes back, asks questions where something is unclear and records the outcome. What it removes is the chasing.
Whichever route a firm uses, the questions are the same: where the money comes from, whether that makes sense for this client and this matter, and whether the answer is recorded so it can be shown later.