Why compliance teams need better client intake software

_{Nick Morgan, Head of Legal Professionals • July 11 2024}

Compliance teams we talk to often feel overwhelmed and under-resourced when it comes to AML compliance. And it’s no surprise — many still use manual, outdated processes. This is where the need for better client intake software comes in. Automating the most time-intensive parts can drastically reduce the time it takes to onboard a client. Thinking about streamlining your law firm’s client intake process? Here’s why your compliance team needs a better client intake solution.

Due diligence is (often) non-billable 

A decade ago, law firms had simpler due diligence requirements. They needed to check a client’s contact information, their background for criminal convictions or past litigation, the state of their finances, and any so-called ‘smoking guns’ — evidence in the public domain that shows the prospect is not being truthful. Today, the process is much more nuanced. It’s about ensuring the right client fit, which demands more time and resources. This shift inevitably leads to more client rejections, risking friction with fee earners since delays and wasted efforts can impact revenue.

There’s still a wide technology gap

The problem with due diligence today is clear: it’s too dependent on human effort and fragmented systems. Manual work still dominates, especially when gathering information using search engines like Google (we talk more about their inefficiencies in this blog).

Despite having so much publicly available information about a client or business online, it remains disorganised and fragmented. Researchers must sift through numerous pages to find what they need. Once they find enough information, they must analyse and summarise it. This often causes cognitive overload since researchers must extensively cross-reference compliance data with adverse media found in sources like news articles.

Intense scrutiny from the regulator

We’ve all seen the headlines—law firm after law firm fined for non-compliance with money laundering rules by the Solicitors Regulation Authority (SRA). Since the start of 2024, regulatory scrutiny has increased and showing no signs of easing off. 

These fines serve as a crucial reminder for firms that lack a fully compliant client risk assessment process. Complying with AML requirements is more than ticking a box — it’s work that enables you to thoroughly know your clients, their business, and any past activities. If you discover a past risk but choose not to turn the client away, you can use those findings to manage risks that may arise later on.

Where AML compliance tools often fall short

Traditional compliance screening tools provide only a ‘yes or no’ answer about risky clients and lack real-time updates. They’re just not suitable for today’s dynamic business landscape and often overlook individuals who are about to be sanctioned or closely associated with sanctioned individuals.

Technology like Natural Language Processing (NLP) identifies key networks and affiliations to help lawyers stay ahead of potential risks. For instance, a client might not directly face sanctions but could appear in media articles as a ‘close friend’ of a sanctioned individual. Traditional sanctions checks overlook these subtleties, but AI-powered tools don’t.

Due diligence is now more crucial than ever and should be done thoroughly… and ongoing. New information about individuals and organisations is constantly emerging online. For a human analyst, going through this data alone is time-consuming and exhausting. Taking shortcuts in due diligence might be tempting, but they can quickly lead to serious ethical, legal, reputational, and financial issues.

Why you shouldn’t ignore AI client intake software

For some law firms, the concern around AI is that it will create more work, while others worry that it will lead to job cuts. That’s definitely not the case. No matter the size of your law firm, AI is essential for maintaining effective compliance and business intake processes.

Imagine cutting your client onboarding times from weeks to just hours. That’s what AI-powered client intake software can do for your law firm, especially when it comes to clearing low-risk clients stuck in the compliance queue. Manual research teams, even when equipped with database and search tools, simply can’t match the power and speed of AI. 

Xapien generates fully-summarised and fully-compliant due diligence reports in under 10 minutes, on any individual or company worldwide. Xapien searches compliance data sets, official registries, and the entire indexed internet to gather all available data about a subject. Our Natural Language Processing (NLP) engine processes this information to extract valuable insights. Finally, these findings are compiled into a fully-sourced, summarised report. To get started, all the tool needs is a name and a piece of context. 

With Xapien, you’ll always be on the pulse 

Xapien is a purpose-built tool for due diligence, transforming it from a potential blocker into a beneficial process for firms. It goes beyond automating information gathering — it empowers compliance teams with crucial insights about clients, ensuring they have a comprehensive understanding right from the start. This enables them to assess clients in alignment with their risk appetite, allocate resources wisely, and strategise effectively for future developments. In today’s dynamic environment where regulations and geopolitical climates are constantly evolving, AI-powered tools like Xapien are designed to stay ahead. As new information arises, Xapien ensures that compliance teams know about it. 

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