The Compliance Officer Role in Law Firms: What Good Looks Like

The Compliance Officer Role in Practice

Designating someone as your Anti-Money Laundering (AML) compliance officer is a legal requirement — but that doesn’t mean just assigning the title to a senior lawyer and moving on.

The effectiveness of your entire AML program often hinges on the person you appoint, how they’re supported, and whether they can actually do the job.

In short: If this role isn’t properly resourced, your compliance framework is at risk.

What Does a Compliance Officer Actually Do?

While legislation may not give a full job description, the expectations are clear. A good compliance officer is responsible for:

• Overseeing the implementation of your AML/CTF program

• Monitoring internal compliance with policies and procedures

• Coordinating responses to suspicious activity

• Reporting to AUSTRAC and other relevant authorities

• Ensuring staff are trained and aware of their responsibilities

What Good Looks Like: Key Attributes and Resources

Knowledge and Expertise

They don’t need to be an AML expert on day one — but they must be given the time and training to become one. That includes understanding the risk-based approach, red flags, due diligence processes, and reporting obligations.

Access to Information

They must be able to view client files, ask questions, and investigate concerns without obstruction — regardless of hierarchy.

Independence and Authority

They need to be empowered to push back on decisions, escalate risks, and say “no” when needed — without fear of being overruled.

Time to Do the Job

This is not a spare-time task. If the person has other responsibilities (as many do), their workload must be adjusted to reflect the seriousness of the role.

Seniority Matters — But So Does Support

In smaller firms, the compliance officer may be the managing partner or principal. That makes sense — they hold the risk and have the authority.

In larger firms, the role may be filled by a senior manager or head of compliance. But if they don’t sit at the leadership table, they must be:

• Directly supported by someone who does, and

• Clearly empowered to act independently on AML issues

Without this, the role becomes toothless — and the whole program is undermined.

Liability, Indemnity, and Governance

Law firms should also consider:

• Providing an indemnity for the compliance officer, especially where personal liability may arise

• Giving access to independent legal advice where conflicts emerge

• Ensuring their role is clearly defined in governance documentation

If you wouldn’t expect someone to act as a partner without a contract or protection — why do it for the person managing your financial crime exposure?

Final Thoughts

The compliance officer role is the cornerstone of your AML program. Treat it as such.

Choose someone with the right mindset. Support them with the right tools. And make sure their voice is heard — not just on paper, but in practice.

Need help defining your compliance officer role or finding the right structure for your firm?

AML Sorted can help you build governance and resourcing plans that protect your people and your practice. Get in touch.