Written by: Eugene van der Walt | Afrikaanse weergawe
Four of South Africa’s biggest law firms walked into the Gauteng High Court recently to challenge a government transformation policy they say is unlawful, unworkable, and will ultimately harm the very people it is meant to help.
The Background
Until September 2024, law firms measured their B-BBEE compliance against the same generic codes as most other industries, and many large firms held Level 1 ratings. Then Minister Parks Tau introduced a Legal Sector Code (LSC) specifically for the legal profession, with significantly stricter ownership and procurement targets. Firms earning over R25 million a year are now required to have 30% of voting rights and economic interest held by black legal practitioners from year one, rising further over time.
What the Firms Are Arguing
Deneys, Bowmans, Webber Wentzel and Werksmans, joined by trade union Solidarity, say the LSC is fundamentally flawed:
- It has no valid legal foundation. The B-BBEE Act requires the Minister to issue a transformation strategy before a sector code may be developed. No such strategy was issued.
- It will backfire. Firms that currently hold Level 1 ratings under the generic codes would drop multiple levels under the LSC, losing billions in government and banking contracts.
- The targets are impossible. The timelines for achieving the required ownership levels are, the firms argue, commercially and practically unworkable.
- It exempts almost everyone else. More than 95% of legal practices fall below the threshold and are entirely exempt, placing the entire burden on a handful of large firms.
Advocate Tembeka Ngcukaitobi SC, representing three of the firms, told the court it cannot fix what is wrong with the LSC; it must strike it down entirely.
The Other Side
The government, the Legal Practice Council, and several black lawyer associations are defending the code vigorously. Their position: the legal profession has been too slow to transform, the LSC is constitutionally sound, and striking it down would set back decades of progress. The court heard from representatives who described the code as vital for ensuring that black lawyers, especially black women, can access the profession’s upper echelons.
Where Things Stand
The matter was scheduled for a full week. On day one, the parties were in settlement discussions, but no agreement was reached. The hearing resumed in open court. A judgment is expected in due course, and when it arrives, it will be the first time a South African court has been asked to rule on a sector-specific B-BBEE code of this kind. We will publish a follow-up the moment a decision is handed down.
Why This Matters to You
If your business relies on B-BBEE ratings when selecting legal or professional service providers, this case directly affects your procurement landscape. If you are a legal practitioner, it shapes the future of the profession. And if you simply care about whether South Africa’s transformation framework is working as intended, this is a case worth watching.
Questions about B-BBEE compliance or how this affects your business?
Van der Walt and Associates Inc. assists clients throughout the Tygervalley area with commercial, regulatory, and compliance matters. Contact us for an initial consultation.
This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice.