Reporting groups for law and accounting firms

For law and accounting firms, AML compliance presents unique challenges and costs, particularly for those operating as multi-office partnerships, networks or corporate groups.

These firms must balance compliance requirements across different offices while ensuring a consistent and efficient approach to risk management, not to mention the cost associated with duplicate programs.

Designated Business Groups (DBGs) become Reporting Groups

AUSTRAC understands these challenges and as such is currently finalising guidance for Reporting Groups (what used to be called Designated Business Groups).

Under the proposed new AML rules, Reporting Groups allow businesses under shared "control", such as a legal or accounting network, or real estate franchise group to implement a single AML/CTF program.

Members of a Reporting Group can share compliance information and rely on customer identification conducted by other members. This means a central compliance function within a corporate group can support all members, streamlining compliance efforts.

Three AML operating models

Although a Reporting Group sounds ideal for larger groups of firms, there are two other models each with its own pros and cons with unique impacts on AML compliance.

Broadly, there are three options:

• Centralised / Reporting Groups
  The parent firm or head office takes the lead on compliance responsibilities, managing activities centrally.
• De-centralised
  Each office or partner operates independently and is responsible for its own compliance.
• Hybrid
  The head office provides oversight and guidance while individual offices retain some compliance control.

Each approach has its own advantages and challenges, which we will explore below.

Option A

Centralised / Reporting Groups

A Corporate-led approach where compliance responsibilities are managed centrally.

How it works

• The head office develops and enforces AML policies across all network members.
• Compliance processes are standardised and centralised compliance staff (e.g. AMLCO and analysts) oversee activities.
• Regular audits and monitoring ensure compliance across the group.
• The head office provides training and centralised compliance tools to all network members.

Example 1: A national accounting firm with multiple offices implements a single AML compliance program where all offices use a centralised customer due diligence (CDD) system and transaction monitoring.

Example 2: A law firm network operating under a shared brand creates a central compliance hub to handle AML obligations for all member firms, ensuring consistency in client onboarding and risk assessment. 

Option B

De-centralised / Go it alone

Each law or accounting office is independently responsible for its own compliance.

How it works

• Each office develops its own AML compliance program, policies and procedures.
• Offices must individually implement training, risk assessments and reporting procedures.
• The head office may provide optional guidance but does not enforce uniform compliance measures.

Example 1: Independent law firms operating under a shared brand name but each handling their own AML checks.

Example 2: A group of accounting firms where each firm independently decides how to verify client identities and report suspicious transactions, with no shared compliance tools, policies or processes.

Option C

Hybrid / Directed by Corporate

A middle-ground approach where the head office provides oversight and guidance, while offices retain some control.

How it works

• The head office sets general AML guidelines and negotiates to supply group-wide compliance solution/s.
• Offices follow these guidelines but retain autonomy in implementation.
• Compliance tools (such as customer verification and screening systems) are provided for consistency.

Example 1: A legal network where firms follow corporate guidelines and use the preferred software / training / professional service providers. However they have their own instances of software and conduct CDD at the individual office level.

Example 2: An accounting group where the head office provides AML policies and compliance tools, but each office is responsible for the procedures they follow when conducting CDD.

Key considerations

Risk of non-compliance and brand protection

• Centralised / Reporting Groups

  Reduces the risk of brand damage by ensuring compliance is managed at the corporate level, with regular audits and standardised policies.
  
  

• De-centralised / Go it alone

  Higher risk of inconsistent compliance, increasing the likelihood of reputational damage if one office fails to meet AML obligations.
  
  

• Hybrid / Directed by Corporate

  Provides oversight but depends on offices adhering to corporate guidelines, leaving some residual risk.

Costs

• Centralised model / Reporting Groups
  

  Requires investment in compliance staff and monitoring technology but is cost-effective in aggregate as resources are shared.
  
  

• De-centralised model / Go it alone

  Higher costs overall, as each office must individually invest in AML systems, training, and compliance personnel.
  
  

• Hybrid model / Directed by Corporate

  Shared investment in compliance tools, with some costs borne by firms. Corporate can negotiate better group-wide terms for compliance software and services.

Next steps

• Discuss compliance structures with partners or management to determine the best model for your firm.
• Consider cost implications and resource allocation well ahead of the 31 March 2026 deadline.
• If choosing a centralised or hybrid model, explore compliance tools and technology solutions to support group-wide AML efforts.
• Educate stakeholders on AML obligations and provide training to ensure smooth adoption of the chosen model.
• Learn from international firms that have already implemented AML reforms and apply relevant insights to your business.