Square AI
AUSTRAC TRANCHE 2 · LEGAL · LIVE 1 JULY 2026

AML CTF compliance for Australian lawyers and conveyancers

From 1 July 2026, you're an AUSTRAC reporting entity. We turn AUSTRAC's Legal Profession Starter Kit and January 2026 sector guidance into 4 working AI workflows in 14 days. Fixed at $4,500. We implement — we don't advise.

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Built on AML/CTF Act 2006 (amended 2024) LPP-aware workflow design We never submit your SMR
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AML CTF lawyers Australia — AUSTRAC Tranche 2 implementation for Australian legal practices
Active enforcement begins 1 July 2026 · Outer enrolment deadline 29 July 2026
60-Second Scope Check

Are you a Tranche 2 reporting entity?

If your practice provides any of the services below, you'll likely need to enrol with AUSTRAC from 31 March 2026, have an AML/CTF program operating from 1 July 2026, and complete enrolment by 29 July 2026 at the latest.

Tick everything that applies to your practice:

Designated services for lawyers are defined under section 6 of the AML/CTF Act 2006 (amended 2024) and Table 6 of the Professional Services schedule. AUSTRAC's January 2026 sector guidance gives further worked examples of when a designated service "commences".

You handle conveyancing or other real property transactions for clients
You operate a trust account or hold client money
You assist clients in creating, restructuring, or administering companies, trusts, or other legal arrangements
You act for clients in wills, estates, or asset-protection structures involving substantial value
Likely in scope. If you've ticked any of the above, your practice probably provides a designated service under Table 6. Confirm with your professional body or compliance counsel — and book a readiness call to start your 14-day Sprint.
Important: This check is a starting point, not a legal opinion. Litigation-only and pure advisory firms may not be captured. Whether a specific service is "designated" depends on the facts of each matter. Always confirm with your professional body or compliance counsel.
The Legal Sector Position

~20,000 Australian legal practices, and most haven't started

Tranche 2 brings in lawyers, solicitors and licensed conveyancers across every Australian state and territory. The major peak bodies have published guidance — but implementation is on you. Australia's FATF mutual evaluation is also scheduled for 2026–2027, raising the stakes for early, defensible compliance.

Law Council of Australia

Federal peak body. Continues to advocate for clarity and transitional support, particularly for small legal practices facing first-time AUSTRAC obligations.

State Law Societies

NSW Law Society (~39k members), Law Institute of Victoria, Queensland Law Society, Law Society of SA and ACT Law Society have all published Tranche 2 hubs and FAQs.

Australian Institute of Conveyancers

State chapters (AICVic, AICNSW, AICQ, AICSA, AICWA, AICACT) coordinate sector-specific guidance for licensed conveyancers operating outside legal practising certificates.

Where we sit in a crowded market

The Tranche 2 market is filling up fast. Most Australian legal practices already use a practice management system (PMS) and a verification provider — and those vendors are now bundling AML features. We're not pretending those don't exist. Here's an honest map of the landscape:

InfoTrack Compliance CentreFree, built with Grant Thornton, integrated with LEAP and Smokeball. Strong on identity verification, evidence storage, and enrolment workflow. Shown to 8,000+ practitioners on the 2026 roadshow.
PMS-native AML (Smokeball, LEAP, Realaml)Smokeball v9.15+ ships AML fields and precedents; LEAP has new compliance features. Good if you already pay for the platform — but limited to what the vendor builds.
Document packs (HeadStart Docs et al.)From around $679 plus a small monthly portal fee. Cheap, but the work of customising the program and operationalising it across staff still falls back on the principal.
Specialist AML consultantsTranche 2 Consultants, AML Advisers, Agentic AML and others — typically $3k–$10k for a tailored program. Strong on documentation, often light on the AI/automation layer.
Enterprise platforms (First AML, Legl, easyAML)Per-seat platforms partnered with ALPMA. Built for firms of 50+ lawyers with a dedicated compliance lead. Overkill — and overpriced — for practices under 20 lawyers.
Big Law advisoryNorton Rose, K&WM, MinterEllison engagements typically $50k–$200k. Tier-1 legal opinion, but you still have to implement what they recommend.
Where Square AI fits: we're the AI workflow layer that sits on top of whatever verification stack you already use — InfoTrack, Realaml, or none. We turn AUSTRAC's Starter Kit and January 2026 sector guidance into a tipping-off-aware, role-tiered, LPP-aware program for under-20-lawyer practices, in 14 days. We're not the cheapest option. We're the one that actually does the operational work for the principal who doesn't have time to.
The Five Obligations

What AUSTRAC requires from every legal reporting entity

The AML/CTF Act 2006 (as amended by the AML/CTF Amendment Act 2024, Royal Assent 10 December 2024) imposes five core obligations. Your AML/CTF program must address each.

Obligation 01

Enrol with AUSTRAC

Lawyers and conveyancers providing one or more designated services must enrol with AUSTRAC. Enrolment opens 31 March 2026. You must enrol within 28 days of first providing a designated service — so the outer deadline is 29 July 2026 for firms going live on 1 July. Enrol earlier than that to receive direct AUSTRAC communications and guidance.

Reference: AML/CTF Act 2006 s.51B (enrolment); AUSTRAC Business Profile Form Explanatory Guide (Nov 2025)
Obligation 02

AML/CTF Program

A documented, risk-based program covering ML/TF/PF risk assessment, governance, customer due diligence policies, training, transaction monitoring, and recordkeeping. Must reflect the size, nature and complexity of your practice. AUSTRAC's Legal Profession Starter Kit, plus the January 2026 sector-specific guidance and ML/TF Risk Assessment Framework Quick Guide for Lawyers, are suitable starting points for small practices (15 or fewer personnel) — but you still must customise and implement.

Reference: AML/CTF Act ss.81–84 (program); Rules s.5-9(2) (training); AUSTRAC Legal Profession Guidance (Jan 2026)
Obligation 03

Customer Due Diligence (CDD)

Identify and verify clients before providing a designated service. For corporate clients, map beneficial ownership (typically 25%+ controlling interest). Conduct sanctions and PEP screening. Verify source of funds for trust account deposits and unusual cash transactions.

Reference: AML/CTF Act ss.32–36 (CDD)
Obligation 04 · Extra care

Suspicious Matter Reports + tipping-off (s.123)

If you form a suspicion on reasonable grounds, you must submit an SMR to AUSTRAC. The amended Act extends the SMR window to 5 business days for legal professionals where information is reasonably believed to be subject to LPP (instead of 3 days), unless the matter relates to terrorism financing.

The tipping-off offence under s.123 is sharper for lawyers than any other Tranche 2 sector: you must not disclose the existence of an SMR or AUSTRAC notice in a way that could prejudice an investigation. Maximum penalty: 2 years imprisonment or 120 penalty units (currently ~$39,600 at $330 per unit), or both. The penalty unit value indexes from 1 July 2026 under s.4AA(3) of the Crimes Act 1914, so this figure will increase post-indexation.

LPP is preserved by the amended Act (Schedule 4): you may refuse to give privileged information to AUSTRAC, and you're exempt from filing an SMR if you reasonably believe all the underlying information is subject to LPP. AUSTRAC has prescribed an LPP form for asserting privilege claims.

Reference: AML/CTF Act s.41 (SMR), s.41(2A) (LPP exemption), s.123 (tipping-off); AUSTRAC Tipping Off Guidance (effective 31 March 2025); Crimes Act 1914 s.4AA (penalty unit indexation)
Obligation 05

Records — 7 years

Retain CDD records, transaction records, training registers, conflict checks, internal SMR-related correspondence, and your AML/CTF program documentation for seven years. This is auditable by AUSTRAC and must survive staff turnover.

Reference: AML/CTF Act ss.107–116 (record-keeping)
Plus: Independent Review

The s.32 review must be external

The Act requires your AML/CTF program to be independently reviewed at appropriate intervals. The reviewer must be qualified and independent of the practice. This cannot be Square AI — we're the implementation partner, not the independent reviewer. We can recommend qualified independent reviewers when you're ready.

Reference: AML/CTF Act s.32 (independent review)
Three Illustrative Scenarios

Where AML risk shows up in legal practice

Illustrative only. These scenarios are composites, not real cases. They show the kind of patterns your AI workflows should flag — but the legal judgment is always the lawyer's, never the AI's.

Offshore trust structure for "asset protection"

PatternNew client requests an opaque multi-jurisdictional trust structure citing asset protection, with reluctance to disclose beneficial owners or source of seed capital.
AI assistsDrafts beneficial ownership questionnaire, runs sanctions and PEP screening, prepares CDD file with red-flag annotations.
Lawyer decidesWhether the suspicion threshold under s.41 is met; whether LPP applies; whether to file an SMR or LPP form.
Legal judgment is the lawyer's responsibility, not the AI's.

Conveyancing — unverified buyer, cash settlement

PatternPurchaser arrives late in matter, uses a corporate vehicle with foreign beneficial owners, instructs settlement via multiple smaller deposits below reporting thresholds.
AI assistsFlags structured-deposit pattern in trust account reconciliation; drafts enhanced CDD prompts; pre-fills SMR template with non-privileged factual matter.
Lawyer decidesWhether to proceed, decline the retainer, or report. AI does not give a recommendation.
Legal judgment is the lawyer's responsibility, not the AI's.

Estate matter — unusual offshore distribution

PatternExecutor instructs distribution of estate funds to multiple offshore accounts in jurisdictions inconsistent with the deceased's residency or relationships.
AI assistsSurfaces inconsistency against the matter file; logs the trigger event with citation; opens a draft case note for the principal.
Lawyer decidesWhether to make further enquiries (without breaching s.123), seek senior counsel, or report.
Legal judgment is the lawyer's responsibility, not the AI's.
The 4 AI Workflows

What we actually build for you

Four AI workflows, customised from AUSTRAC's Legal Profession Starter Kit and January 2026 sector guidance, integrated with your practice management software, delivered in 14 days.

Workflow 01

CDD Intake Agent

Smart client onboarding for both individuals and corporate clients — runs the parts of CDD that are mechanical, leaves the judgment to you.

  • Automated ABN/ACN lookup, beneficial ownership mapping for corporate clients (25%+ controllers)
  • PEP and sanctions screening on every new client and material change
  • Source-of-funds prompts for trust-account deposits
  • Conflict-check integration with your existing matter management
  • Red-flag annotations against AUSTRAC indicators for the legal sector
The AI never makes the engagement decision — that's always the lawyer's call.
Workflow 02

Training Register Automation

Tiered training tracker matched to the roles in your practice, with a dedicated tipping-off awareness module.

  • Tiered modules: admin staff / paralegals / lawyers / partners
  • Mandatory s.123 tipping-off awareness module on every tier
  • CPD-compatible logging where your CPD scheme allows
  • Auto-renewal reminders, completion tracking, AUSTRAC-ready export for inspection
  • Seven-year retention, audit-ready
Built to satisfy s.5-9(2) of the AML/CTF Rules and your peak body's CPD framework.
Workflow 03

SMR Draft Assist

Pre-built SMR templates aligned to the AUSTRAC structure for legal practitioners, with explicit LPP-aware drafting prompts.

  • Templates for the patterns lawyers actually see — structured deposits, opaque trust structures, unusual estate instructions
  • LPP-aware drafting: separates factual matter from privileged information, prompts for LPP-form completion when needed
  • 5-business-day SMR clock for matters involving privileged content (per amended s.41 timing)
  • Tipping-off controls built in: only authorised personnel see SMR detail; client-facing staff see operational requests only
The AI never submits an SMR. The lawyer or MLRO reviews, signs and submits personally — every time.
Workflow 04

Ongoing Monitoring & Alerts

File-level risk flags during matter management plus quarterly review reminders — light-touch, principal-friendly.

  • Trust-account anomaly alerts (structured deposits, third-party payers, unusual settlement instructions)
  • Beneficial-ownership change checks for ongoing corporate clients
  • Quarterly review prompts for higher-risk client tiers
  • Automatic CDD-refresh reminders aligned to your risk-rating
Designed for principals, not compliance teams. No dashboard hell.
Live interactive demo

See how the workflows actually run

Walk through the AI agents the way your staff would — onboarding a corporate buyer, logging staff training, drafting an SMR from file notes, and triggering a beneficial ownership refresh. No signup. No sales call. Roughly 5 minutes end to end.

Watch the live demo
~5 minutes No signup required Real workflows, sample data
CDD Intake
Onboard a corporate buyer
Training Register
Log a staff session
SMR Draft Assist
Draft from file notes
Monitoring
Beneficial ownership refresh
Pricing

Fixed-price, not per-seat

Compatible with your existing practice management software. Conveyancers: same product, smaller scope possible — call for fixed quote.

14-DAY DELIVERY

AML/CTF AI Sprint

For legal practices under 20 lawyers

$4,500 AUD · once

Fixed price. No per-seat fees. No platform lock-in.

  • Customised AML/CTF program from AUSTRAC's Legal Profession Starter Kit + January 2026 sector guidance
  • 4 AI workflows configured to your practice software (LEAP, Actionstep, Smokeball, FilePro, PEXA)
  • 60-minute live staff training including s.123 tipping-off module
  • Australian-hosted data, you keep the IP
  • Live by 1 July 2026 if you start before 17 June 2026
Book free 15-min readiness call

Optional Monthly Retainer

Keep your program current

$300 / month

Cancel anytime. Not required.

  • Monthly monitoring of trust-account anomaly flags
  • Training register updates and renewal reminders
  • Quarterly client risk-rating review
  • Program updates when AUSTRAC issues new guidance
Add to Sprint quote

Founder pricing for the first 100 firms — locked in for 12 months.

14-Day Delivery

From kit to live program in two weeks

A linear, partner-friendly schedule. No compliance committee meetings. No project plans the size of a brief.

Week 1 · Days 1–7

Practice review & program customisation

We map your designated services, review your matter types and trust-account flow, and customise AUSTRAC's Legal Profession Starter Kit to your practice. Includes a 60-minute scoping call with the principal.

Week 2 · Days 8–13

AI workflow integration

We integrate the four workflows with your practice management software — LEAP, Actionstep, Smokeball, FilePro, or PEXA for conveyancing — and run a private test cycle with sample matters before go-live.

Day 14 · Go-live

Staff training, register live

60-minute live training session with role-specific modules: admin, paralegals, lawyers, partners. Includes a dedicated tipping-off awareness module. Training register active. Program operational.

Why Square AI for Legal

Pick the implementation that fits your size

An honest comparison. We're not the right answer for every firm. If you already pay for Smokeball or LEAP and trust your verification provider, sometimes the smartest choice is to add us as the workflow layer — not replace what's working.

Option 1DIY Starter Kit

Use AUSTRAC's Legal Profession Starter Kit as published.

  • Free
  • 60–100 partner hours
  • No automation
  • You build the training register

Option 2PMS-native / InfoTrack

InfoTrack Compliance Centre or your PMS's built-in AML features (Smokeball, LEAP, Realaml).

  • Free or included
  • Strong on identity verification
  • Light on tipping-off training
  • You still customise the program

Option 3Enterprise platform

First AML, Legl, or easyAML — partnered with ALPMA.

  • Full platform
  • Per-seat pricing
  • Mismatched for under 50 lawyers
  • Platform lock-in

Option 4Big Law advisory

Norton Rose, K&WM, MinterEllison engagement.

  • Top-tier legal opinion
  • $50k–$200k typical
  • Months, not weeks
  • Advice, not implementation

Option 5 · Square AI$4,500 Implementation

Starter Kit + 4 AI workflows in 14 days. Sits on top of your verification stack.

  • Fixed $4,500 AUD
  • 14 days to go-live
  • You keep the IP
  • Works alongside InfoTrack/PMS
FAQ

Honest answers to legal-sector questions

How does this compare to InfoTrack's Compliance Centre or my PMS's built-in AML features?
Different jobs, often complementary. InfoTrack's Compliance Centre, Smokeball's AML fields, LEAP's compliance features and Realaml are excellent at identity verification, document collection, evidence storage, and the basic enrolment workflow. They are not, on their own, an AML/CTF program — and they do not deliver tipping-off awareness training, role-tiered staff modules, or LPP-aware SMR drafting. Where firms hit problems is the gap between "we have the rails" and "we have a working, defensible program operating across every staff member by 1 July 2026." We build that operational layer. If you already use InfoTrack or your PMS's AML features, we don't ask you to rip them out — we plug into them and run the workflow on top.
Do paralegals and admin staff need AML/CTF training?
Yes. Section 5-9(2) of the AML/CTF Rules requires training for all personnel whose work relates to a designated service or to the practice's AML/CTF compliance. That includes paralegals, conveyancing clerks, trust-account staff, and reception staff who handle ID verification or take instructions. We tier the training by role so each person only sees what they need.
Do conveyancers have different obligations than solicitors?
Substantively, no — both are reporting entities if they provide designated services. The two AUSTRAC starter kits (Legal Profession + Conveyancing) target different operating models: solicitors operating under practising certificates use the Legal Profession Kit; licensed conveyancers operating outside practising certificates use the Conveyancing Kit. Mixed practices need to maintain a risk assessment for each. We handle both.
What's the LPP intersection with SMR obligations?
The AML/CTF Amendment Act 2024 (Schedule 4) preserves legal professional privilege. New section 41(2A) provides that you may refuse to give an SMR if you reasonably believe all the underlying information is privileged. If only some information is privileged, you submit the SMR with non-privileged information and lodge AUSTRAC's prescribed LPP form for the rest. Reporting timeframe is extended from 3 to 5 business days for SMRs involving privileged information (except terrorism financing). This is a nuanced area — confirm with your professional body or compliance counsel before relying on any specific position.
What's tipping-off (s.123) — what can I and can't I say to a client?
Tipping-off under s.123 is a criminal offence carrying up to 2 years imprisonment or 120 penalty units (currently ~$39,600 at $330 per unit; the unit value indexes from 1 July 2026 under s.4AA of the Crimes Act 1914 so the figure will increase), or both. You must not disclose the existence of an SMR, the fact that an SMR obligation has been triggered, or details of an AUSTRAC notice in a way that could reasonably be expected to prejudice an investigation. Safe: telling a client you need to collect more information to comply with general AML/CTF obligations. Not safe: any reference to suspicions, investigations, SMRs, or "concerning activity". If you need to end a retainer, give a genuine reason that doesn't indicate suspicion. Route any sensitive discussion through your designated compliance officer.
Can the AI submit an SMR for me? Why not?
No, and we won't build it that way. Submitting an SMR is a legal act with legal consequences. The lawyer or MLRO must review, sign, and submit personally so they can attest to the s.41 reasonable-grounds threshold and apply LPP carefully. Our SMR Draft Assist drafts the report and pre-fills factual matter; you review, edit, sign and submit through AUSTRAC Online.
How does this work with my professional indemnity insurance?
PI policies vary. Most insurers see Tranche 2 implementation as risk reduction, not risk creation, but you should notify your broker before 1 July 2026 and confirm cover for AML/CTF related work. Some peak-body PI schemes (LawCover NSW, LPLC Victoria) have published specific Tranche 2 guidance. We don't advise on insurance — but we can supply a one-page summary of our scope of work for your broker.
How does this work with the s.32 independent review?
Section 32 requires your AML/CTF program to be reviewed independently at appropriate intervals by a qualified reviewer who is not the implementer. Square AI cannot perform your independent review — we built the program. We can recommend independent reviewers (typically AML consultants, audit-trained compliance specialists, or external counsel) when you're ready, usually 12–18 months after go-live.
Is Square AI a law firm?
No. We are not a law firm and do not provide legal advice. We're an Australian AI implementation agency. We turn AUSTRAC's Legal Profession Starter Kit and January 2026 sector guidance into working software for your practice. All legal advice on your AML/CTF obligations — including LPP application, the suspicion threshold, and the s.32 review — must come from your own compliance counsel or peak body.

Don't be the firm that missed the deadline

Book a free 15-minute readiness call. We'll confirm whether your practice is in scope, walk you through the Sprint, and give you a fixed quote on the spot.

Important — legal disclaimers
Square AI is not a law firm and does not provide legal advice. Information on this page is general in nature and is not a substitute for legal advice. We provide AML/CTF implementation services only. Your AML/CTF program must be reviewed by qualified compliance counsel or your professional body. The independent review required by s.32 of the AML/CTF Act 2006 must be conducted by a qualified independent reviewer who is not Square AI. The intersection of legal professional privilege with AML/CTF reporting obligations is nuanced — consult your professional indemnity insurer and compliance lawyer for matter-specific advice. Use of AUSTRAC's Legal Profession Starter Kit does not guarantee compliance — your AML/CTF program must reflect the size, nature and complexity of your practice. We use the phrase "AUSTRAC-aligned", never "AUSTRAC-approved".
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