Major law firms challenge new Legal Sector Code aimed at transformation.
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The need for transformation in the legal sector is at the core of the Legal Sector Code (LSC), and it is a lawful exercise of statutory power to achieve this, counsel for Justice Minister Mmamoloko Kubayi told the Gauteng High Court, Pretoria.
Advocate Zinzile Matebese SC on Wednesday asked the court to turn down the application by four of the country’s largest law firms, in which they are asking that the LSC be overturned.
Firms Deneys (formerly Norton Rose Fulbright), Bowmans, Webber Wentzel, and Werksmans are asking the court to review the sector-specific B-BBEE (Broad-Based Black Economic Empowerment) framework for the South African legal profession gazetted by the Minister of Trade, Industry and Competition Parks Tau in September 2024.
According to them, it is irrational, impractical, and illegal and will not achieve transformation.
Matebese argued that the bid to invalidate the LSC is not because it is unlawful, but because it imposes meaningful and necessary targets that challenge the slow pace of transformation within the applicants’ own structures and seek to ensure that they are intentional about achieving the transformation of the legal profession.
“The applicants’ challenge is not rooted in a genuine concern for a lawful process or rational policy. It is a self-interested attempt to preserve the status quo that benefits the applicants commercially.”
He added that under the existing Generic Codes of Good Practice, the applicants have been awarded and have maintained a Level 1 B-BBEE status, the highest possible rating.
This, while demonstrating negligible or no transformation at all, particularly regarding black women and participation in specialised, lucrative areas of law.
Matebese added that the minister feels strongly that the transformation of the legal profession is a constitutional imperative.
“The LSC is the product of an extensive, multi-year consultative process involving the entire legal sector. It was developed to address the unique and persistent inequalities within the legal profession – a sector where the Generic Codes have proven wholly inadequate.”
Matebese argued that “the fact that the applicants could achieve a Level 1 B-BBEE status under the Generic Codes despite demonstrably poor transformation in senior ownership and management is the most potent evidence justifying the need for a new, sector-specific code.
”The mere fact that the impact of the LSC will weigh more heavily on some law firms than others is not a ground for review. It is to be expected that any transformation measure will have negative consequences on those entities that are not sufficiently transformed,” he told the court.
He accused the applicants of failing to provide the court with essential data on their own transformation.
“They disclose global figures for black ownership but withhold the breakdown for black women. They say nothing about how many of their black partners practice in specialised commercial fields versus traditional areas.”
Matebese said without this, their claims that the LSC’s targets are unachievable are speculative and self-serving.
“The legal profession is a key gateway to the judiciary and the economy. Its continued lack of transformation, particularly at senior levels in large commercial firms, undermines the constitutional project. The LSC is a rational and proportionate means to address this.”
Arguing on behalf of Minister Tau, Advocate Fana Nalane said the minister is empowered and enjoined by legislation to undertake certain steps to promote economic transformation.
“The LSC was developed in order to achieve the objectives of the B-BBEE Act within the legal sector or legal profession. Its purpose is to address inequities resulting from the systemic exclusion of black people from meaningful participation in the economy to access South Africa’s productive resources, economic development, employment creation, and poverty eradication in the legal sector.”
According to him, there are sufficient common commercial and professional characteristics in the legal sector to make it feasible and appropriate to develop a sector-specific code to address the unique characteristics of the legal sector.
Proceeding.
zelda.venter@inl.co.za