Law firms with four partners or fewer are the most vulnerable to criminal infiltration following the introduction of new anti-money laundering regulations this month, the former head of Scotland Yard's anti-money laundering investigation team told the Gazette this week.

Regulations implementing the second EU Money Laundering Directive this week extended the class of solicitor required to make suspicious transaction reports to include family lawyers and conveyancing practitioners among others.

Cliff Knuckey - who formed Scotland Yard's anti-money laundering team in the 1990s and headed it until last year - said that ease of access for clients and a poor track record for implementing proper know-your-client procedures made small firms the most vulnerable.

Mr Knuckey, who is now managing director of compliance group RISC Global, said it was difficult for criminals to target the bigger City firms because lawyers in those practices 'tend to work in teams which makes it hard to get the necessary introductions'.

The warning came as the Solicitors Accounts Rules are being updated to highlight a recent Solicitors Disciplinary Tribunal ruling, which held that it is improper for solicitors to operate banking facilities through client account for third parties.

Louise Delahunty, the chairwoman of the Law Society's money laundering and serious crime task force, said: 'There is no evidence to show that smaller firms are more vulnerable than large ones, and in my experience all sizes of firm have become substantially more aware of their vulnerability.'

Meanwhile, a Law Society commissiond survey of 1,000 members of the public revealed that only one in five knows that, under the new regulations, they have to prove their identity to their solicitors.

See [2004] Gazette, 4 March, page 14

By Jeremy Fleming