Friction in your client intake process? AI can help

Client intake is a multifaceted process that involves compliance teams working across various tools and systems. It typically takes 30 to 90 days to onboard a new client, largely due to the manual effort involved in Customer Due Diligence (CDD). However, this stage is critical for assessing any risks associated with a client relationship. 

Extracting data from multiple databases individually is time-consuming and often leads to numerous false positives. Moreover, running manual web searches to find adverse media adds to the workload. The challenge lies in transforming this information into clear narratives that inform risk scores and client risk assessments.

Comprehensive due diligence often requires balancing available resources with time constraints. Given the financial impact of delays, firms need efficient onboarding processes. Enter client onboarding tools powered by AI.

How do law firms onboard new clients?

A law firm’s client intake process involves onboarding new clients and satisfying regulatory requirements before assigning them to fee-earners. This process, while necessary, is often time-consuming and non-billable. From the moment a potential client finds your firm to when they officially become a client, there are two major bottlenecks: pre-screening and due diligence based on their level of risk. 

Pre-screening happens before a firm’s partner meets a potential client. In the past, they might have quickly Googled them from the back of a taxi or asked an associate to pull together a quick report. But these days, there’s no such thing as a quick search. Plus, with some partners billing over £1500 an hour, scrolling through Google isn’t the best use of their time.

Once the client chooses a firm, it’s time for the compliance team to perform identity checks and perform the correct level of due diligence. At a minimum, this includes screening against PEPs and sanction lists, and checking watchlists. Sometimes, running a Google search with keywords like “fraud” and “corruption.” 

While law firms aim for thorough and clear client intake decisions, it’s often a challenge to scale this process given the time it takes to assess each client.

Frequent bottlenecks in the client intake process

When engaging new clients, compliance teams are increasingly asking not just whether they can (legally) engage with an entity, but whether they should (ethically). And it isn’t just an ethical decision, but a reputational one with major financial consequences. For instance, with anti-Russian sentiment high, many UK law firms have cut ties with Russian-linked individuals and organisations due to the reputational costs of these ties. 

These are complex decisions that take into account several factors, but the key to unlocking these decisions lies in true understanding of the potential client.

Existing compliance tools are ill-equipped to facilitate these nuanced decisions. PEPs and sanctions look-up tools provide yes or no answers about known risky individuals. But what about those who are about to be sanctioned or close associates of those who have? 

Though there have been wide-scale international efforts to find and identify these people, many networks are yet to be uncovered. And as we’ve seen, sanctions regulations are rapidly evolving, making it hard to keep track. This calls for a deeper research process to be conducted on potential clients than traditional tools allow.

How AI technology can streamline client intake 

An AI-powered background research tool is essential for finding and analysing millions of sources of public information quickly. Manual researchers, even with the best database and search tools, just can’t compete on speed and efficiency. 

The specific, valuable information that an AI tool can uncover is critical for building a comprehensive client intake process. This is becoming increasingly important for law firms that want to maintain effective compliance and new business intake processes.

Imagine a new client approaches a corporate lawyer at law firm A for help with a merger. Law firm A’s risk and compliance team runs their standard search, checks some databases, and Google keywords like “fraud” and “corrupt.” It takes a couple of hours, and they find no issues.

Now, picture law firm B, law firm A’s big competitor. They get approached by the same client but use Xapien for their research. In just 7 minutes, Xapien uncovers news reports linking the benefactor to Putin and suggests the owner might hold assets on Putin’s behalf.

Law firm A is left in the dark, and onboarding this client could lead to a front-page scandal about supporting Putin’s lifestyle. This would be disastrous for its reputation, with clients likely jumping ship. But law firm B can make an informed decision about the risks involved. 

Most law firms want detailed and clear insights when deciding on new clients, but it’s challenging without the right technology. Xapien can dig deep and deliver comprehensive research quickly, helping compliance teams and decision-makers take on clients with a full understanding of any hidden risks. 

Why firms should consider using AI legal tools 

Competition is rife among law firms. A frictionless client intake process could be the difference between winning and losing a multimillion-pound engagement. At the same time, keeping and developing those client relationships depends upon understanding the full scope of your clients’ backgrounds. Using tools powered by AI technology, law firms can benefit from comprehensive awareness of their clients’ entire portfolio, quickly. 

• Client intake teams no longer waste time investigating clients that won’t pass due diligence whether for compliance, reputational, ethical other reasons.

• To stay ahead of the competition, law firms need to be able to onboard their clients quickly. But often, compliance processes are a drag on the business. AI automates the most time-intensive parts of due diligence while clients are left waiting. 

• Deliver more tailored results. AI can provide a comprehensive view of the client and their business(es) and networks. This can inform legal strategy once the client is on board. Lawyers can deliver genuinely tailored solutions to their clients.

• Identify new potential clients, risks, and opportunities. By revealing associates, networks, corporate and personal interests, lawyers can spot future risks and opportunities for them and their clients.

• Beyond regulatory and reputational risks, the insights generated can help the firm decide if the prospective client is a mutual fit with the firm. This can lead to more fruitful relationships for both sides.

Xapien’s automated background reports take 5-10 minutes. The broad and deep analysis that Xapien delivers within this time leads to massive increases in efficiencies in client intake processes, and bigger business opportunities. You can learn more about how Xapien serves law firms here, or speak to the team using this form.