Attorney paymaster services are an important part of transactions in certain industries. When you are looking for an attorney who offers these services, it’s important to be prepared for what you will encounter prior to and during your relationship with a firm.
Attorney paymasters must follow strict and specific rules to participate in these transactions, so you will need to be ready to comply with requests related to your business activities.
Preparing to Work with an Attorney Paymaster
The most important thing that an attorney will need to do in advance of any transaction is learn more about you, your business and your transaction(s). In the industry, it’s referred to as “Know Your Customer (KYC)” and “Customer Due Diligence” (CDD).
Both these activities are required to comply with anti-money laundering (AML) laws and regulations and will be part of the process no matter what industry you work in or what type of transaction you are planning.
Know Your Customer
These processes generally consist of identification and compliance checks. Your attorney paymaster will do some preliminary screening with various government watchlists and databases. During KYC, you will need to provide a variety of personal and/or business documents, including:
- Government-issued personal identification
- Articles of incorporation
- Business licenses
- Organizational charts
- Activity profile for your business
- Size, frequency and types of transactions
- Additional information for KYC on individual corporate officers
- Documents and information about any other corporations or entities that your business owns (including overseas entities)
The specific item(s) your attorney needs will vary, depending on your business. Not every KYC will involve each of these items, but it’s important to be prepared to keep the process moving.
Customer Due Diligence
The next step is due diligence, which includes a risk assessment and “scoring” related to your occupation, industry or entity type. The attorney paymaster will use this information to identify your expected transaction size, frequency, geographies, products and other relevant information.
Ultimately, this is used to create a “risk matrix” and activity profile, which allows the attorney paymaster to monitor and flag suspicious activity in the future.
Compliance with KYC and CDD Protocols
Your attorney paymaster is required to comply with federal and international laws and regulations related to financial transactions, and courts have upheld that responsibility for attorneys who failed to perform adequate checks and ultimately were party to internet scams or other money-laundering activities.
While the process may seem frustrating, it’s important to understand why it’s necessary. Being prepared with the right paperwork can help speed the process, especially for large or complex organizations.