Three in five (58%) legal professionals informally sampled have expressed concern that proposed AML reforms could affect legal professional privilege.
The finding comes from a poll of 204 legal professionals, which was carried out during a webinar hosted by compliance and training providers VinciWorks and Compliance Office. Attendees were discussing the government proposal to significantly reduce the role of the Solicitors Regulation Authority (SRA), making the Financial Conduct Authority (FCA) the single professional services supervisor for AML.
According to VinciWorks, privilege concerns formed part of a broader set of apprehensions about regulatory approach and supervisory expectations.
While the majority of those polled expressed concern at the potential change, 43% of attendees said it is too soon to form a view, and 21% said they felt positive or cautiously optimistic. Over a quarter of respondents (28%) identified themselves as feeling either ‘worried’ or ‘sceptical’.
When asked which potential impact of FCA supervision would be most significant, the largest share of respondents selected the FCA’s data and reporting requirements (29%).
A further 26% identified a loss of legal-sector nuance, and 21% identified stricter enforcement or higher penalties. Cost and regulatory burden was mentioned by 21 of respondents.
The poll also suggested that most firms anticipate needing to invest in preparation for an FCA regime. More than half of respondents (56%) expect at least a moderate or very significant investment. A smaller proportion (23%) expect minimal or no investment, while 22% remain unsure.
Ruth Mittelmann Cohen, head of legal compliance at VinciWorks, believes firms have questions about how privilege will be protected in a very different supervisory culture.
She said:
“Many legal professionals raised the issue of legal professional privilege as their first concern. The sector is accustomed to regulators who understand legal practice and the central role privilege plays in it.
“With more than half of respondents reporting concern about how privilege will be managed in the future, it is clear that firms want reassurance that existing safeguards will be maintained.”
Jennifer Dunlop, managing director at Compliance Office, said that many companies are preparing for a model that requires clearer documentation of decision-making and greater scrutiny of case records.
She said:
“Legal professionals recognise that an FCA-led system is likely to involve more data, more evidence testing and more formalised reporting.
“The concern is not only about the volume of information but also about how sensitive material will be protected. With firms still working through what this transition could mean, the level of unease reported in the poll reflects a profession seeking clarity and workable safeguards.”
The consultation on the reforms is open until 24 December 2025.
