Latest news with #LegalSectorCode
IOL News
3 days ago
- Business
- IOL News
Kubayi calls for law firms to withdraw their challenge against the Legal Sector Code
Justice and Constitutional Development Minister Mmamoloko Kubayi says it is an embarrassment that 30 years into democracy, there is still talk about transformation in the legal profession to benefit the previously disadvantaged. Image: Jairus Mmutle / GCIS Justice and Constitutional Development Minister Mmamoloko Kubayi has urged major law firms to reconsider their legal challenge against the Legal Sector Code aimed at transforming the legal profession. Responding to oral questions in the National Council of Provinces, Kubayi expressed her disappointment over the ongoing court challenge by Norton Rose Fulbright, AfriForum, and others. 'I raise the issue that if the companies that have taken us to court, such as Norton Rose Fulbright and others, could pull out of court because, to be honest with you, what we have here is an embarrassment 30 years down the line we are still talking about making sure that we can be able to bring those who were previously disadvantaged to the fore to participate,' she said. Kubayi commented when she was asked whether any government-wide capacity and systems exist to monitor briefing patterns of attorneys or advocates by the state organs on litigations against the State. In her response, she said her department does not have the government-wide capacity and systems to monitor the briefing and outsourcing of legal work patterns. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ Ad loading 'The department monitors the outsourcing and briefing patterns of cases outsourced to private practitioners through the Office of the State Attorneys (OSA) on behalf of the national and provincial spheres of government.' Kubayi stated that municipalities and state-owned enterprises have their own systems of outsourcing legal work. 'The State Attorney Act, as amended, is silent on whether municipalities and state-owned enterprises are supposed to consume legal services from OSA or not.' Kubayi explained that former Justice and Constitutional Development minister Ronald Lamola and the Legal Practice Council initiated in 2020 the process for the development of a transformation sector code. The process was guided by the Broad-based Black Economic Empowerment Act, and it culminated in the adoption of the proposed Legal Sector Code in February 2021. The Legal Sector Code is aimed at transforming the briefing patterns in favour of the previously disadvantaged legal practitioners, and was gazetted on September 20, 2024. Kubayi said the Legal Sector Code was currently being legally challenged through the courts by the big law firms led by Norton Rose Fulbright. She further said the Legal Sector Code provided for the establishment of the Legal Sector Code Charter Council (LSCCC) by the Ministry to monitor outsourcing targets for private and public institutions to improve participation of historically disadvantaged practitioners and law firms in the legal sector. 'The briefing patterns for the public and private sectors will be monitored by the LSCCC with the assistance of the Solicitor General's office.' Kubayi also said it was important to be transparent in the manner they did the briefing patterns but also be accountable because some of the issues touched on corruption where people would want to charge more for services but did not deliver. 'When I met with the law Society of South African and black professionals in the sector, the issue was raised that we have got to be able to hold each other accountable.' She noted that she got lashed out by ministers complaining that OSA allocated a particular advocate who could not argue their case, and as a result, lost the court case. 'I will do a preparatory meeting or engagement with my colleagues in national government, but another issue is to do a roadshow to provincial executives, sit with them and make them understand why sometimes we have a lot of money that we are spending on litigation when we are not supposed to. That is one of the areas that we need to be working on, and we'll continue to improve on it.' Kubayi also said one of her tasks was to ensure that black advocates were not only briefed by the state, but were paid on time. 'I still get a lot of people saying, I've done work, 30 days have passed, 60 days have passed, I've not been paid. That's one of the critical areas that is important, because if we do not pay them on time, they will not be able to sustain themselves.'
Mail & Guardian
13-06-2025
- Business
- Mail & Guardian
The law is not neutral — it serves power or it serves the people
The recent court challenge by corporate law firms against the Legal Sector Code is more than a legal dispute, it represents a profound political and institutional crisis. It calls on all members of the legal fraternity, across every sector, to respond with clarity, conviction and courage. The law does not exist in a vacuum, untouched by our country's history, and neither should we. At the core of this legal challenge is a disturbing message that the inclusion of black people in key parts of the legal sector is bad for business. The use of law to defend elite power is nothing new — it has long been a tool for preserving exclusion in South Africa. From the legal justifications of apartheid to post-apartheid tactics of delay and obstruction, the legal profession has often stood guard over the gates of privilege. It is therefore unsurprising — though no less alarming — that this claim is now being made under oath, in a country where the majority is black. If this moment does not compel us to speak out, then perhaps we are complicit in the unequal future being forged in our name. As in every contested space, power does not yield without a contestation — it fortifies itself. The government's black economic empowerment code for the legal sector reveals that, three decades into democracy, these corporate law firms have not been able to self-regulate in a way that meaningfully includes black professionals at the highest levels. These same firms are adept at identifying black talent on university campuses, sitting on transformation committees, publishing polished equity reports and championing mentorship initiatives. Yet, when real accountability is required and they are asked to disrupt entrenched patterns of opportunity, democratise access to work for smaller firms or transparently report on transformation progress, they recoil, and compliance is then framed as a threat to their freedom to trade. This is not a principled stand; it is a calculated defence of privilege. It exposes a profession more committed to the appearance of transformation than to its substance. While these corporate law firms tie transformation in red tape and legal technicalities, we must remember that the Constitution is not neutral. It is a charter for total social transformation and it commits South Africa to a future rooted in social justice, human dignity, equality and freedom for all. It rejects all forms of racism and sexism and it demands that we all play a role in building an inclusive society. We must abandon the romantic notion that the Constitution will do the work on its own. As a transformative charter, it demands action — not from some anonymous public, but from the very institutions and professions that now invoke it to escape accountability. Section 22 of the Constitution protects the right to choose one's profession and it was never meant to entrench monopoly power. Yet, in the hands of some corporate firms, it is being used to stall transformation and delegitimise a fair redistribution of opportunity. When a fraternity sees the very Constitution born of struggle being used to shield privilege, the bitter irony must not go uncontested because corporate law firms are not exempt from confronting the dissonance between constitutional ideals and the lived realities of South African society. The rule of law must never be weaponised to preserve an unjust social order. If these firms truly valued legal integrity and constitutional governance, they would have embraced transformation long ago. They've had more than 30 years and have consistently chosen not to. Similarly, had they attended to meaningful transformation, government intervention would not be necessary. Similarly, Kathleen Dlepu, former chairperson of the Legal Practice Council, asked: 'What if the voices of resistance to the Legal Sector Code aren't just coming from the usual suspects? What if, behind the legal jargon and procedural masks, we find the fingerprints of those who once pledged allegiance to transformation, not as outsiders, but from within?' Her words force uncomfortable questions: Who signed these court papers? Which senior counsel is willing to lend their name to this gatekeeping? Which junior counsel, allegedly the future, is being showcased as window dressing while undermining black advancement? These questions matter because law is never neutral. It either serves power or it serves the people and the South African story requires that the law is used for the good of the people. The entire legal fraternity bears a social responsibility to take a clear and public stance on what is unfolding. The disproportionate stranglehold on transformation maintained by firms that built their power during the darkest chapters of this country's history must be called into question. We cannot look to institutions that profited from the systemic exclusion of black people to lead us into a just future especially when their messages, no matter who delivers them, ultimately undermine the legitimacy of black practitioners. Transformation is not a favour; it is a constitutional imperative that rests on all stakeholders. This is a moment for clarity — not compromise. The legal profession cannot continue to obscure its failings behind rhetoric. It cannot claim nobility while actively defending structural exclusion and those of us who believe in the Constitution's vision must be willing to call this out for what it is — a crisis of legitimacy. Beneath the veneer of constitutional argument lies a longstanding truth — the powers that control corporate law in South Africa hold the view that transformation in the legal profession is, and has always been, treated as optional. Similarly, this is a moment to acknowledge that entry into elite corporate law circles has often required silence about the racial inequalities that continue to shape our profession. People died for this democracy. Scores of people willingly and unwillingly gave up their singular human experiences in the name of the idea that, one day, this country would not require the well-being and prosperity of black people as a sacrifice for a firm to remain in business. We cannot let those sacrifices happen in vain. Bwanika Lwanga is a corporate and commercial attorney and a columnist with an interest in African regional trade, spatial justice and social justice issues. Abongile Nkamisa is a lawyer and legal researcher interested in corporate accountability, access to information and law to advance social justice.
The South African
07-05-2025
- Business
- The South African
Gatekeepers gone rogue: Why Big Law's Legal Sector Code challenge deserves contempt
This article is written reluctantly. However, the writer has no real option but to write this opinion piece, as the application brought by Webber Wentzel, Bowmans, and Werksmans (in its current form) is not only disingenuous, but alarmingly out of touch with South Africa's constitutional and transformative imperatives. It reads as a strategic retreat disguised in legalese; a reaction not to unfairness, but to the discomfort of transformation gaining ground. Last month, three of South Africa's largest corporate law firms — Bowmans, Webber Wentzel, and Werksmans —intervened in Norton Rose Fulbright's legal challenge against the Legal Sector Code (LSC), gazetted by the Minister of Trade, Industry and Competition. The firms seek to have the code reviewed and set aside, arguing it is unlawful, irrational, and unconstitutional. In a country where transformation is not a luxury but a constitutional imperative, the Legal Sector Code (LSC) represents a long-overdue step toward an equitable profession that reflects the demographics of South Africa. Let's be clear: the LSC is not a revolution. It is not asking for reparations. It is asking, ever so politely, that the legal profession begin to reflect the demographics of the country it claims to serve. It sets targets for ownership, management control, skills development, and procurement; all tailored specifically for a profession that has systematically excluded black South Africans from the highest echelons of influence for generations. That some of the largest and most prestigious law firms—who have benefited immensely from an inequitable system—now oppose that code should be enough to raise eyebrows. Of importance is that the Code was first published for public comment in 2022. Bowmans, Webber Wentzel, and Werksmans i.e. the Big Three of Resistance did, in fact, comment during this process, and those comments were taken into account in finalising the Code. The LSC was signed off by Minister Ronald Lamola in October, but later blocked from publication by then-Minister Patel. As frustration mounted, several stakeholders—including NADEL (The National Association of Democratic Lawyers) and the Black Lawyers Association—threatened legal action. It was ultimately the Black Conveyancers Association (BCA) that formally instituted litigation to compel gazetting. The case was later withdrawn after Minister Parks Tau, under the 7th Administration, assured that all conditions had been met and committed to publication. The episode reflects the persistent political resistance transformation continues to provoke—and the resolve of black professional formations to see it through. While Minister Ronald Lamola was a key stakeholder, the legal authority to gazette Sector Codes rests solely with the Minister of Trade, Industry and Competition under Section 9 of the B-BBEE Act. The Code was ultimately gazetted by Minister Parks Tau on 20 September 2024, after confirming all legal and procedural requirements were met. At the heart of their founding affidavit, the firms argue: The LSC applies only to less than 5% of legal practices — excluding over 95% of firms from its scope — yet imposes severe and disproportionate targets on large firms. No transitional period was provided before implementation. Several deviations from the Generic Codes (e.g., in ownership, management control, skills development, and socio-economic development) lack the required justifications based on 'sound economic principles, sectoral characteristics or empirical research.' The LSC excludes black non-lawyers in calculating transformation metrics — a move the applicants say is unjustified and discriminatory. The process leading to the LSC's gazetting was flawed: the Minister did not address the concerns of his predecessor, Minister Patel, who declined to publish the Code due to legal and procedural irregularities. The B-BBEE targets could cripple the applicant firms' procurement competitiveness and violate their existing client obligations, particularly in the public and financial sectors. But that is just a summation; let us now get into the meat of it: the founding affidavit spans over 110 pages and raises 11 grounds of review—each of which we will unpack in detail below, following the broader context and summary provided above. Minister Tau acted unreasonably and/or irrationally The applicants argue that Minister Tau should not have gazetted the Code without first confirming that Minister Patel's concerns were resolved. However, it is important to note that the formal consultative process for the Legal Sector Code (LSC) spanned five to six years, beginning in earnest around 2018/2019. While broader conversations on legal sector transformation predate this, structured and sustained engagements specific to the LSC trace back to that period. The Department of Trade, Industry and Competition (DTIC) was not blindsided; it participated, advised, and contributed to drafts. That Patel did not personally sign off is not a legal requirement. Moreover, the Minister of Justice is empowered under section 9 of the B-BBEE Act to issue sector codes in consultation—not co-dependence—with the DTIC. Against this backdrop, any suggestion that Minister Tau acted unreasonably or irrationally is unconvincing. Exclusion of 95% of legal practices This is a wildly misleading figure. The LSC is binding only on firms with an annual turnover of R10 million or more. That threshold is standard in all sector codes. Smaller firms are measured using the Qualifying Small Enterprise (QSE) or Exempt Micro Enterprise (EME) scorecards, just as in other sectors. The majority of black-owned firms are QSEs and EMEs. The complaint here is not about exclusion—it's about the discomfort of finally being included. Absence of a B-BBEE Strategy under section 11 This ground collapses under basic legal literacy. Section 11 of the B-BBEE Act allows, but does not require, the Minister to issue a strategy. The existence of sector codes does not hinge on the prior publication of a national strategy. In any event, the DTIC's 2019 national B-BBEE strategy is publicly available. Breach of section 9(2) of the Constitution The applicants suggest that the Code's provisions are 'self-defeating' and violate equality rights. This is a bizarre inversion of logic. The LSC was created precisely to give effect to section 9(2), which allows for measures to advance persons disadvantaged by past discrimination. It is not for the historically privileged to suddenly claim victimhood when structural redress is finally enforced. Arbitrary ownership targets The LSC sets a 50% black ownership target by year five. In a country where approximately 93% of the population is non-white, it is both inaccurate and intellectually dishonest to assert that a target of 50% black ownership within five years is unachievable. The demographics of the population clearly align with the potential for such equitable representation in partnerships. Alternative forms of equity such as profit sharing and equity equivalents are also recognised in the Codes. Other professional sectors have complied; legal firms must too. Unworkable targets for black legal spend Firms are required to brief black advocates and instruct black-owned firms. The profession has long lamented the lack of black counsel getting briefs—now that there's a policy solution, it's suddenly 'unworkable'? The LSC recognises market realities by allowing a ramp-up period and includes flexibility where specialist skills are lacking. Use of unmeasurable indicators This is incorrect. Every element in the scorecard includes a measurable target and verification standard. The Codes of Good Practice mandate verification agencies to assess B-BBEE compliance based on submitted evidence. If some firms cannot produce records, the fault lies not in the Code but in their own HR and procurement departments. Misalignment with Generic Codes The LSC was developed in line with the DTIC's guidelines, as acknowledged in the gazetted notice. Sector codes are, by definition, allowed to depart from generic frameworks to accommodate sector-specific dynamics. The legal sector is not exempt from that flexibility. Breach of the Rule of Law This is a buzzword argument with no legal backbone. The Code was developed after a transparent, multi-year consultation involving major stakeholders. It was gazetted after proper public comment and signed by the competent authority. Nothing about it undermines the Constitution or legislative supremacy. Specialised scorecard for state institutions The applicants are not state-owned entities and thus lack standing to object to this clause. But for clarity: the scorecard for organs of state simply encourages them to support transformative procurement. It's aspirational, not binding. Lack of a transitional period There was a six-month lead-up to the gazette date and an effective grace period thereafter. Moreover, the DTIC's practice notes make clear that measurement periods can overlap with old codes for a brief time. The hysteria is misplaced. The firms emphasise that while they support transformation and B-BBEE, they believe the Code in its current form threatens not only their operational sustainability but also the broader objectives of economic inclusivity and access to justice. Exactly how a framework designed to promote inclusion and equity threatens inclusion and equity is anyone's guess — but apparently, in the alternate reality of Big Law, equity is dangerous when it asks too much of the privileged. The irony is rich: the very firms now dragging the Legal Sector Code to court are the same ones desperate to retain the Level 1 B-BBEE ratings that guarantee them a steady pipeline of lucrative state work. They want the benefits of transformation without the burden of accountability. It's a paradox; suing the state for enforcing the very code that underpins the procurement rankings they depend on. If the goal is to remain eligible for public sector briefs, the solution isn't litigation. It's compliance. Instead, these firms would rather challenge the rules than play by them; a move that exposes exactly why the Code is needed in the first place. This article is also written against the backdrop of the amendments to the Employment Equity Act (EEA), a cornerstone of South Africa's legislative framework aimed at addressing the deep-rooted structural imbalances that continue to plague our corporate landscape. The developments are a direct response to the entrenched disproportionality that defines the composition of top management in many sectors, where the overwhelming dominance of white men persists despite decades of democracy. The EEA does not merely encourage transformation as a moral ideal — it mandates it as a legal and societal necessity. The significance of the Act has been unequivocally endorsed by President Cyril Ramaphosa, who has consistently reaffirmed the government's commitment to substantive transformation in the private sector. President Ramaphosa has explicitly stated that the private sector remains skewed, with top management still overwhelmingly controlled by white males, and he has called on companies to be more inclusive and reflective of South Africa's demographics. He has defended the EEA as a vital instrument that not only prohibits unfair discrimination but actively seeks to correct the inequalities of the past. According to the President, these laws are not an overreach — they are part of a broader effort, built over the last three decades, to dismantle the structural inequality inherited from apartheid. It is against the development of these progressive labour laws, designed to move the country toward justice and equity, that efforts to undermine transformation must be scrutinised. In particular, the actions of the 'big three' law firms, who now challenge transformative instruments like the Legal Sector Code, stand in direct contradiction to the spirit and letter of employment equity legislation. Rather than embracing the responsibility to lead by example, these firms appear to entrench exclusionary practices under the guise of legal technicalities, undermining the very goals that the Employment Equity Act seeks to achieve. Perhaps the most galling aspect of the LSC challenge is who's leading it. Not just white firms, but also a few black professionals who have made it to the top and now seem intent on pulling the ladder up behind them. This isn't just a legal fight — it's a moral abdication. As legal scholar Dr. Mandisa Mahlobo aptly put it in a recent panel on transformation: 'Representation isn't enough. We need redistribution — of power, of resources, and of opportunity.' Transformation in the legal sector has been glacial. In 2018, the LSSA reported that only 36% of attorneys were black and just 35% were women. At partner level, the disparities are starker. According to the Law Society's 2023 statistics, only 17% of attorneys in senior positions are black, and less than 10% are black women. More than 60% of legal spend in the private sector goes to the same few firms — firms that now seek to entrench the very exclusivity they claim to be reforming. It is no coincidence that these same firms who wave the Level 1 flag are gatekeeping the work that status brings in. The Generic Codes may help firms attract clients, particularly from the public sector, but the benefits often stop at entry. Junior black attorneys are routinely excluded from the most lucrative matters, often offered no meaningful bonuses or promotions, and ultimately pushed out under the pretext of not meeting billable targets. Promotion data since 2022 in these firms shows an alarming disconnect between the public transformation rhetoric and private practice reality. This invites an uncomfortable question: is the Generic Code, without enforceable sector-specific guidance, merely a legalised form of fronting? If the black lawyers who help achieve Level 1 B-BBEE ratings are not getting the work, not being promoted, and not staying in the profession, then something is deeply wrong. Transformation is not measured by PowerPoint presentations or glossy brochures. It is measured by power — who holds it, who shares it, and who is systematically kept from it. South Africa's corporate sector also bears responsibility. It continues to abet these firms, rewarding Level 1 B-BBEE status without asking how it is achieved or whether it translates into real, lived transformation. It is simply enough to tick the box. No accountability. No follow-through. Just performative compliance wrapped in progressive language. Instead of engaging with the substance of the Code, Webber Wentzel, Bowmans, and Werksmans have chosen the path of obstructionism. These are not cries of injustice, they are tantrums from gatekeepers reluctant to yield space. Against this background, it becomes increasingly difficult to view the challenge to the Legal Sector Code as a good-faith objection rooted in technical or procedural shortcomings. Rather, it bears all the hallmarks of a systemic, coordinated attempt to defang transformation under the familiar guise of 'practicality' and 'sustainability.' The interventions by the big three of resistance only reinforce this concern. While these firms publicly tout their support for transformation and parade their previously disadvantaged candidate attorneys as evidence thereof, their decision to align with NRF's legal challenge exposes a troubling and deliberate inconsistency. Their argument that the Legal Sector Code is unworkable or too onerous mirrors the same rhetoric historically deployed to stall meaningful transformation: commitment in language, resistance in practice. If the Generic Codes were truly adequate, we would not still be contending with such glaring underrepresentation of black practitioners, particularly in ownership and senior leadership. These interventions do not seek to refine or enhance the Code. They aim to dilute its impact and shield entrenched privilege, all while posturing as reasonable critique. This is not pragmatism; it is a refusal to confront the structural inequalities the Code was expressly designed to remedy. As the Constitutional Court reminds us, transformation is not optional. The time for debating whether we need redress has passed. What remains is the task of implementation. If this is the hill Big Law wants to die on, let them. We'll be too busy building something better. The courts may decide the case — but the people have already judged the intent. Let us know by leaving a comment below, or send a WhatsApp to 060 011 021 1 Subscribe to The South African website's newsletters and follow us on WhatsApp, Facebook, X and Bluesky for the latest news.
IOL News
23-04-2025
- Business
- IOL News
What the big law firms don't want South Africans to know
The opponents of economic transformation will never surrender without a fight, the author argues. Image: Supplied In January this year, Norton Rose Full Bright (Norton Rose), formerly Deneyz Reitz (an apartheid law firm) - recently joined by AfriForum, Solidarity (white minority NGOs), Bowmans, Werkmans and Webber Wentzel - announced their decision to legally challenge the Legal Sector Code (The LSC), that was gazetted by the Minister of Trade and Industry, and Competition. The LSC is the BBBEE measurement framework for the legal profession. In their challenge, Norton Rose asks the court to find that the LSC is invalid, irrational, and unlawful, the decision by the Minister to gazette the Sector Code. Norton Rose goes on to allege that if the LSC is not set aside, they (only they and 5 other large firms) will suffer prejudice as their BBBEE level will drop significantly from level 1 to 6. This means that they will lose a lot of government legal work as a better BBBEE level rating is required for government work. There are just over 10,000 law firms in SA. Most of these firms are in support of the LSC. The small and medium law firms (both black and white-owned) and entities - especially those whose annual revenue is less than R5 million - are not expected to comply with the LSC since it mainly benefits them. The legal challenge of the LSC is not entirely unexpected, especially since it seeks to disrupt the status quo, however the court application by Norton Rose actually confirms the long held suspicion that the opponents of economic transformation in South Africa, and everywhere in the world, will never surrender without a fight. Notwithstanding this, and despite the claim by these large firms that they are "committed to transformation" - which we know they are not - there is still a lot that they do not tell South Africa. Just to rub it in, they continue to use black faces and professionals as proxies in opposition to transformation. The senior counsel on brief in this application, for example, are mainly black males. In March this year, for instance, coming out of a parliamentary question addressed to the Minister of Justice and Constitutional Development, it became clear that the so-called large law firms combined, earned more than R100 million in legal fees over the past 5 years from the state and its departments. This excludes the spend on black law firms and Advocates. The figures could be higher. There is still no account or indication of how much of this landed in black hands. Favouring the status quo What these Law Firms also do not tell SA is that, in essence, they are in favour of a measurement framework that effectively retains the current status quo. This not only promotes white-owned firms in fostering their receipt of more legal work, but also perpetually discriminates and increases the skewed briefing patterns in the legal sector. The LSC is the product of an inclusive, consultative, and transparent process that was aimed at giving real effect to constitutional transformation. Over seven nationwide consultations with Industry stakeholders were held.
