LegalAI[Space]

Regulatory and compliance · MLRO, compliance manager, risk partner

Review a client file against the money laundering rules

A firm's MLRO has pulled a sample of thirty client files ahead of an internal review. The grid reads each file for the due diligence actually evidenced, rather than for the tick on the front sheet.

First draft
A file-by-file gap report comes back from one grid run across the sample.

The problem

Client due diligence failures are almost always evidential. The identity check was done and the copy was never saved, the source of funds was discussed and never recorded, the beneficial ownership was verified against a register nobody kept a copy of. A front sheet with every box ticked tells the MLRO nothing about any of that.
  1. Step 01 of 05

    Load the sample

    Thirty client files are uploaded with their matter opening forms, identity documents and any source of funds correspondence.

    Matters · Project Halcyon · SPA warranties and disclosureOpen

    Project Halcyon: SPA warranties and disclosure

    Buy-side warranty review, disclosure analysis and cited due-diligence grid.

    Client
    Halcyon Bidco Ltd
    Reference
    WC-2026-0412
    Practice area
    Corporate / M&A
    Jurisdiction
    England and Wales
    Responsible partner
    E. Vance
    No conflict check on file.

    Chat, on this matter

    Compare warranties with the disclosure letter.

    Three high-priority exceptions require action: the unregistered charge, the change-of-control right and the tribunal claim.

    Send a message… (@ to mention tools)BalancedPrepare for
    1. 25 Aug

      Disclosure exceptions matrix

      Chat

    2. 21 Aug

      Disclosure exceptions matrix

      Run · completed · 560 credits

    3. 18 Aug

      Project Halcyon: Disclosure Letter

      Document · indexed

    4. 16 Aug

      Project Halcyon: Share Purchase Agreement

      Document · indexed

    5. 4 Aug

      Matter opened

      Opened

  2. Step 02 of 05

    Write the due diligence columns

    Columns cover client identification, verification evidence, beneficial ownership, source of funds, risk rating, enhanced measures where applicable and ongoing monitoring.

    Document Review · Hartwell matter · contract screen0/12 filled
    DocumentParties and effective dateTEXTTerm and renewalTEXTLimitation of liabilityTEXTGoverning lawTEXT
    nda-hartwell-meridian.txt
    saas-agreement-northgate.txt
    board-minutes-hartwell.txt
  3. Step 03 of 05

    Run the sample

    Each file is answered against every column, with the evidencing document quoted where it exists and the cell marked as unevidenced where it does not.

    Document Review · Hartwell matter · contract screen0/12 filled
    DocumentParties and effective dateTEXTTerm and renewalTEXTLimitation of liabilityTEXTGoverning lawTEXT
    nda-hartwell-meridian.txt
    saas-agreement-northgate.txt
    board-minutes-hartwell.txt
  4. Step 04 of 05

    Read the pattern

    Source of funds is the weakest column across the sample, and every file rated high risk was opened by the same two fee-earners without enhanced measures recorded.

    Document Review · Hartwell matter · contract screen0/12 filled
    DocumentParties and effective dateTEXTTerm and renewalTEXTLimitation of liabilityTEXTGoverning lawTEXT
    nda-hartwell-meridian.txt
    saas-agreement-northgate.txt
    board-minutes-hartwell.txt
  5. Step 05 of 05

    Take the remediation plan

    The Audit & Risk Agent produces a ranked remediation list, separating files that need work before the next transaction from those that need a record correcting.

    Agents · Contract Agent · New runMatter: Northgate · senior associate hire

    Agent

    Jurisdiction

    Prepare for

    Deliver as

    Instruction

    What should the agent look for?

    Documents

    Drop a contract, or pick one from the matter

    Also on the matter

    • Offer_letter_v3.pdf2 pages
    • Staff_handbook_2025.docx61 pages
    • Board_minute_14_Aug.pdf3 pages
    Platform model · zero data retention · audit register on

What comes back

A document, not a transcript.

  • A file-by-file grid showing what is evidenced, what is recorded without evidence and what is absent.
  • The pattern across the sample, including the weakest check and the two fee-earners it clusters around.
  • A remediation list ranked by urgency, separating live risk from record-keeping repair.
  • A note on the training point the pattern suggests, framed as an observation for the MLRO.

Authorities it checks

  • Money Laundering Regulations 2017, SI 2017/692, regs 27 and 28
  • Proceeds of Crime Act 2002, s 330
Every source it may cite

What it does not do

  • It does not make a suspicious activity report or decide whether one is required on any file.
  • It does not verify a client's identity or check a document against an official register.
  • It does not set the firm's risk appetite; it measures the files against the policy the firm already has.

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