Does Customer due diligence (KYC) on every customer apply to lawyers and solicitors?
A computed answer from the Rules Mate applicability engine, with the exact condition, the outcome for every structure and size, and the primary source.
Short answer: Yes
Yes. This obligation applies to lawyers and solicitors whatever their structure or size. The deciding fact: Tranche 2 industry (Lawyers & solicitors) — AML/CTF reporting entity from 1 July 2026.
The obligation in brief
Customer due diligence (KYC) on every customer. Reporting entities must collect and verify customer identification information before providing a designated service. For non-individuals, beneficial owners (≥25% control or ownership) must be identified.
Trigger: Onboarding a customer for a designated service.
Why lawyers & solicitors get a different answer
Rules Mate runs its applicability engine across 9 business structures and 6 size bands for each of the 35 industries it maps. For 27 of those industries the answer for "Customer due diligence (KYC) on every customer" is no. Lawyers & solicitors is one of the 8 where the answer is different: yes.
The deciding fact for lawyers and solicitors: Tranche 2 industry (Lawyers & solicitors) — AML/CTF reporting entity from 1 July 2026.
About the industry: Law firms providing designated services. LPP applies, but Tranche 2 obligations otherwise apply.
Compare a professional services (general) business with 6–19 employees structured as a Pty Ltd company: the obligation does not apply (Requires an AML/CTF designated service).
Answer by business structure and size
Each cell is the engine's outcome for a business in lawyers & solicitors with that structure and size, assuming it sells to consumers and small businesses and holds customer contact details. "Check" means the obligation turns on a fact the industry does not settle.
| Structure | No employees | 1–5 employees | 6–19 employees | 20–99 employees | 100–499 employees | 500+ employees |
|---|---|---|---|---|---|---|
| Sole trader | Yes | Yes | Yes | Yes | Yes | Yes |
| Partnership | Yes | Yes | Yes | Yes | Yes | Yes |
| Trust | Yes | Yes | Yes | Yes | Yes | Yes |
| Pty Ltd company | Yes | Yes | Yes | Yes | Yes | Yes |
| Public company | Yes | Yes | Yes | Yes | Yes | Yes |
| Not-for-profit (unregistered) | Yes | Yes | Yes | Yes | Yes | Yes |
| Registered charity | Yes | Yes | Yes | Yes | Yes | Yes |
| Super fund | Yes | Yes | Yes | Yes | Yes | Yes |
| Foreign company | Yes | Yes | Yes | Yes | Yes | Yes |
Designated services that catch lawyers & solicitors
| AML/CTF Act reference | Service | Customer for due diligence |
|---|---|---|
| s 6 table 6 item 1 | Assisting a person to plan or execute a real estate transaction (not under a court order) | The person assisted |
| s 6 table 6 items 2–4 | Assisting with the sale or purchase of a body corporate or legal arrangement; holding, controlling or managing client money or property for a transaction; equity or debt financing | The person assisted |
| s 6 table 6 items 5–9 | Selling shelf companies; creating or restructuring companies and trusts; acting as, or arranging for someone to act as, a director, secretary, trustee, partner or corporate power of attorney; acting as a nominee shareholder; providing a registered office or principal place of business address | Varies: for company creation, the proposed beneficial owners and directors; for an express trust, the trustee, settlor and beneficiaries; for nominee and officer services, the nominator |
- Transfers made under a court order (probate, family law consent orders) are excluded from items 1 and 2.
- Class exemptions in the 2026 Amendment Rules cover barristers acting for government, duty lawyers and court referrals, and the legal assistance sector.
- Legal professional privilege is preserved: a suspicious matter report that relies on privileged information has 5 business days, and the tipping-off offence has a good-faith dissuasion exception for lawyers (s 123(4)).
AUSTRAC publishes a legal profession starter kit (version 2, released 10 June 2026) for practices whose practitioners hold practising certificates and that meet the other suitability criteria.
What the obligation requires
- When due
- Before providing the designated service. Ongoing for customer relationships.
- Evidence to keep
- KYC records (identity documents, beneficial ownership), PEP/sanctions screening evidence, EDD documentation.
- Maximum penalty
- Each unverified customer can be a separate contravention — up to $36.4M (body corporate) or $7.28M (individual), maximum per contravention
- Regulator
- AUSTRAC
- Jurisdiction
- Commonwealth (national)
Other obligations where lawyers & solicitors differ from the norm
- Designate an AML/CTF Compliance Officer: Yes
- Detect + enhance due diligence on Domestic + Foreign PEPs: Yes
- Enrol with AUSTRAC as a reporting entity: Yes
- Maintain a written AML/CTF program: Yes
- Suspicious matter, threshold, and IFTI reporting to AUSTRAC: Yes
- Independent review of AML/CTF program: Yes
- All 17 answers for lawyers & solicitors
Other industries with a non-default answer
Questions
- Does Customer due diligence (KYC) on every customer apply to lawyers and solicitors?
- Yes. This obligation applies to lawyers and solicitors whatever their structure or size. The deciding fact: Tranche 2 industry (Lawyers & solicitors) — AML/CTF reporting entity from 1 July 2026.
- Is the answer the same for every industry?
- No. For 27 of the 35 industries Rules Mate maps, the answer is no. Lawyers & solicitors is one of 8 industries with a different answer.
Related
Sources
- AUSTRAC: official source
- Anti-Money Laundering and Counter-Terrorism Financing Act 2006
- AUSTRAC guidance
- AUSTRAC: Professional designated services (table 6)
- Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (compilation in force 1 Jul 2026)
Computed by the Rules Mate applicability engine from the published obligation corpus; facts last checked 3 October 2026. Rules Mate is not a law firm and this is general information, not legal advice. Confirm your position with the regulator source or a qualified adviser before acting.