Lawyers Warned: Failure to Verify Client Funds May Lead to Fee Loss

In a recent conference organized by the BNH Governance and Professional Network Forum in Abuja, a Senior Advocate of Nigeria, Mr. Michael Numa, emphasized the importance of lawyers conducting thorough 'Know Your Client' (KYC) checks. Numa stressed that this is not only a regulatory requirement but also a crucial step in preventing potential losses. He noted that Nigeria has made significant progress in strengthening its corporate governance and transparency measures, including its removal from the Financial Action Task Force (FATF) watchlist last October. However, Numa cautioned that this achievement does not guarantee investment and that the country must continue to demonstrate its commitment to transparency and compliance. The senior lawyer also highlighted the need for lawyers to conduct due diligence on the sources of their clients' funds, warning that failure to do so could result in the forfeiture of their fees to the federal government. Furthermore, Numa pointed out that the National Assembly has overruled a previous court decision, which had exempted lawyers from disclosing the sources of their clients' funds. As a result, lawyers are now obligated to conduct KYC not only on their clients but also on the payment of their fees. Numa emphasized that this is a critical responsibility, as lawyers could be held liable if their fees are paid from high-risk or sanctioned countries and they fail to conduct proper due diligence. In addition to Numa's remarks, another Senior Advocate of Nigeria, Mr. Oyetola Atoyebi, stressed that governance is not solely a regulatory responsibility but also a professional one. Atoyebi noted that professionals, including lawyers, company secretaries, and auditors, play a crucial role in bridging the gap between regulatory standards and institutional reality. He emphasized that professionals must not only identify relevant laws and regulations but also translate them into meaningful implementation and provide guidance on governance principles. The conference, which was attended by dignitaries from the public and private sectors, aimed to promote good governance and responsible institutional behavior.