A Complete Back Office in Practice: A Case Study in File Opening, AML and Billing Support

File opening, anti-money laundering checks and billing rarely feel urgent on any given day, yet they are the first places a regulator or an unhappy client looks. Under paragraph 2.3 of the SRA Code of Conduct for Firms, a firm stays accountable for compliance even where work is carried out through people it contracts with, so delegating the preparation never delegates the responsibility. This case study shows how a supervised Complete Back Office handles the preparation for all three, and where the firm’s own decisions have to stay. The scenario is a composite of the pattern we see across small litigation practices, not a named client.

What does a complete back office cover in a law firm?

A complete back office is a dedicated, supervised team that runs a firm’s recurring operational work as one function: file opening, case management updates, AML documentation, diary management and billing preparation. Paralegal Outsourcing UK prices it as one fixed monthly fee, starting from £3,000 per month, rather than task by task. The firm keeps every decision that carries regulated responsibility.

The full scope is set out in our article on what a fixed-fee back office includes month to month, and the systems side, opening files correctly and keeping the case management system current, is covered in back-office legal operations. What distinguishes the package from a single dedicated paralegal is breadth: file opening, AML and billing all run at once, inside the firm’s own systems, under one written scope.

The case: a small litigation firm with three fee earners

Picture a litigation firm with three fee earners and one part-time administrator. Files are opened by whoever takes the call, so no two look alike. Client and matter risk assessments exist on most files but not all, and some record a rating with no reasoning behind it. Time is recorded, but bills go out when a partner finds an afternoon, so work in progress sits unbilled for weeks. None of this is negligence. It is the ordinary drift of a firm whose fee earners are busy earning fees.

That drift matters because regulators sample exactly these files. In its Anti-Money Laundering Annual Report 2024-25, the SRA reported that 833 firms received an onsite inspection or desk-based review, with non-compliance found in nearly a third of cases. The breaches it lists are unglamorous: missing client and matter risk assessments, absent source of funds checks and unrecorded identity verification.

How does outsourced file opening work?

Outsourced file opening means the back office team gathers the instruction details, runs the conflict search against the firm’s records, drafts the client care documents from the firm’s own templates and sets up the matter with key dates diarised. The fee earner reviews and approves before the file goes live. Every file therefore starts from the same checklist, whoever took the instruction.

In the composite firm, the team took over new-instruction set-up. A properly opened file typically shows:

• The client identified, including who the client is where several people are involved (paragraph 8.1 of the SRA Code of Conduct for Solicitors).
• A conflict search recorded before work starts, reflecting paragraph 6.2 of the same Code.
• A client care letter carrying the pricing information paragraph 8.6 requires, plus any price publication required by the SRA Transparency Rules.
• Privacy information under Article 13 of the UK GDPR and, for consumer clients instructing at a distance, cancellation information under the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013.
• Limitation and key dates diarised, for example under the Limitation Act 1980.
• AML documentation opened on the same file, not in a separate folder.

The conflict search itself remains the firm’s check against the firm’s own client list. What a dedicated team adds is the absence of a second risk: because it works only for one firm, the outsourced element carries no conflict exposure beyond the firm’s own, as we explain in how conflicts of interest are avoided structurally.

How does outsourced AML support work for a law firm?

Outsourced AML support gathers and documents the evidence a firm needs under the Money Laundering Regulations 2017: identity verification, beneficial ownership, sanctions and politically exposed person screening, and source of funds. The firm’s compliance officer sets the risk rating and decides whether to proceed. The outsourced team prepares the file; it does not take the risk decision.

The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 require customer due diligence under regulation 28, enhanced due diligence for high-risk situations under regulation 33, and PEP measures under regulation 35, with records kept for five years under regulation 40. The SRA’s guidance on client and matter risk assessments adds that the assessment must reflect the firm-wide risk assessment and warns against untailored off-the-shelf templates.

The rules also moved this summer. The Money Laundering and Terrorist Financing (Amendment) Regulations 2026 (SI 2026/621) came into force on 30 June 2026 and, among other changes, narrowed the enhanced due diligence trigger for complex transactions to those that are unusually complex. Policies, templates and training need refreshing to match, which is exactly the recurring maintenance work a back office absorbs.

In the composite firm, the team ran verification, screening and source of funds evidence gathering on each new instruction inside the firm’s case management system, and recorded who approved each risk rating and when. That dated trail is what an inspector asks to see, and it is the standard described in our AML and compliance support article. A COLP testing the arrangement can work through our COLP checklist for outsourced legal support.

Escalation matters more than the check. In R v Da Silva [2006] EWCA Crim 1654, the Court of Appeal treated suspicion as a possibility, more than fanciful, that the relevant facts exist, rather than a vague unease. A team member who sees that possibility reports it internally and stops. Contacting the client risks the offence of tipping off in section 333A of the Proceeds of Crime Act 2002, and the decision whether to report under section 330 stays with the firm’s nominated officer. The SRA has also said the FCA is to become the single professional services AML supervisor, subject to enabling legislation, so consistent files will matter to whichever supervisor inherits them.

How does billing support work under the SRA Accounts Rules?

Billing support means the back office team prepares the billing: reconciling time and disbursements to the ledger, drafting bills with a proper narrative and chasing payment. The fee earner approves each bill, and the firm’s authorised signatories control the client account. The SRA Accounts Rules and the Solicitors Act 1974 set what a bill must be and when client money can be applied to it.

Three provisions shape the work. Rule 4.3 requires a bill or other written notification of costs before client money is moved to pay them, for no more than the sum stated. Rule 8.4 requires a readily accessible central record of bills, and rule 8.3 requires client account reconciliations at least every five weeks, signed off by the COFA or a manager. Under section 69 of the Solicitors Act 1974, no action to recover costs may be brought until one month after a signed bill has been delivered.

Narrative matters too. In Ralph Hume Garry v Gwillim [2002] EWCA Civ 1500 (BAILII summary), the Court of Appeal held that a bill must give enough narrative for the client to judge whether to seek assessment, taking into account what the client already knows. Drafting that narrative from a properly kept time record is precisely the preparatory work a back office does well. Paragraph 8.6 of the Code separately requires clients to receive the best possible information about pricing as the matter progresses, and the same principle of agreeing price and scope before work starts applies to the firm’s own supplier arrangements, as we note in our comparison of fixed fee and hourly billing.

In the composite firm, monthly bill runs replaced ad hoc billing. The team assembled draft bills against each matter’s agreed pricing, the fee earner amended and signed, and each bill was logged to the central record. What to charge remained the fee earner’s decision throughout.

Who stays responsible when back-office work is outsourced?

The firm does. Paragraph 2.3 of the Code for Firms keeps the firm accountable for work carried out through others, and the SRA’s effective supervision guidance, updated in June 2026, expects delegation to be directed, controlled and recorded. The Court of Appeal’s decision in Mazur v Charles Russell Speechlys LLP [2026] EWCA Civ 369 concerned the conduct of litigation, which these three functions largely sit outside, but it confirms the same principle: an unauthorised person may act for an authorised person who retains responsibility. We explain the practical effect in what changed for supervision after Mazur.

Function	Back office prepares	Firm decides and signs
File opening	Instruction details, conflict search results, draft client care documents, diarised dates	Whether to accept the instruction, who the client is, sign-off of terms
AML	Identity and ownership evidence, sanctions and PEP screening, source of funds documents, draft risk assessment	Risk rating, enhanced due diligence, whether to proceed, any internal report
Billing	Time and disbursement reconciliation, draft bills with narrative, payment chasing	Amount charged, signing the bill, authorising client account transfers
Records	Dated file notes, instruction and review trail	File review, COFA sign-off of reconciliations

The record is the protection. A dated instruction, a reviewed draft and a recorded sign-off are what supervision in writing looks like on a file, and what an inspector will ask to see, as we set out in what to document for an SRA inspection.

Client data also leaves the UK when a delivery team works outside it, which engages Chapter V of the UK GDPR. The ICO’s guidance on international transfers explains the safeguards, such as the International Data Transfer Agreement or the UK Addendum, and the transfer risk assessment that goes with them. A firm should see both in writing before data moves. What the contract must say is covered in our guide to a data processing agreement for law firms, and the transfer mechanics in international data transfers for SRA-regulated firms.

A checklist before scoping a complete back office

• List every file-opening, AML and billing task fee earners currently do themselves.
• Name the individuals who keep each decision: compliance officer, nominated officer, COFA and supervising partner.
• Confirm the team works inside the firm’s existing case management system, with matter-limited access.
• Agree the instruction and review record for every delegated task.
• Obtain the data processing agreement, transfer mechanism and transfer risk assessment before any client data moves.
• Agree review points and how scope changes, in a written scope document settled before the fee is fixed.

What this means for a firm carrying this back-office load

A firm with untidy file opening, patchy risk assessments and irregular billing is not failing at law. It is running three compliance-critical functions on whatever time is left over, and the exposure is practical: an inspector who finds an undocumented source of funds check, a bill that cannot be enforced, or work in progress that never reached a ledger. That is the gap Paralegal Outsourcing UK is built to close, with supervised, documented, flat-fee support that prepares the work while the firm keeps the decisions. Our How it works page sets out what starting looks like, our Pricing page shows the Complete Back Office from £3,000 per month against the cost of building the same capacity in-house, and you can get in touch to talk through a specific caseload.