Why Big Law’s Legal Sector Code challenge deserves contempt

16 Views

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.

Norton Rose Fulbright’s legal challenge against the Legal Sector Code

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 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The case was later withdrawn after Minister Parks Tau, under the seventh administration, assured that all conditions had been met and committed to publication.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.

Employment Equity and the Legal Profession: A Framework for Change

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.

The Real Tragedy

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.”

Data doesn’t lie

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.