International law firm Norton Rose Fulbright SA (NRFSA) has resolved to let go of its legal challenge seeking to temporarily suspend a newly implemented policy aimed at transformation of the legal sector.
The firm initiated a legal challenge against trade, industry and competition minister Parks Tau, over implementation of the BBBEE legal sector code, a policy initiative introduced last year to ensure black practitioners had strengthened ownership of law firms. The legal challenge was split in two parts.
First, the firm urgently sought an interim order to suspend the legal sector code’s operation pending the second part of the application in which it wanted the Pretoria high court to declare the legal sector code unlawful and unconstitutional.
There have been long-standing complaints by black lawyers about the slow pace of transformation in the sector that is dominated by the big five law firms: Bowmans; Cliffe Dekker Hofmeyr; ENSafrica; Webber Wentzel; and Werksmans.
Tau was meant to file court papers last Friday answering to the interim order plea; however, this week the department and law firm had consultations.
Brent Botha, a director at NRFSA, told BusinessDay after a consultative process with the department on Tuesday, the law firm agreed to forego the application for an interim order to suspend the legal sector code’s operation.
“NRFSA has agreed to a proposal of the ministry of trade, industry and competition, regarding the next steps in the litigation with a view to seeking a progressive outcome for all parties. NRFSA remains committed to the objectives of the LSC [legal sector code] but, in the interests, among others, of seeking clarity on the implementation of the code, and to seek a conclusion more expeditiously on the merits of the application, NRFSA has agreed to forego the interdicting of the application of the code,” Botha said.
In court papers Botha argued the legal sector code “imposes targets that are unreasonable, impractical and unrealistic, given the nature of large law firms.”
The new policy, which replaces the generic BEE code policy, large firms face targets to increase black ownership, management control and procurement.
This includes targets that the firms must achieve 30%-50% voting rights for black practitioners. That is the same range for executive management roles in the next five years.
“The effect of the legal sector code is severe and irreparable. In an instant, as at the date of its next BBBEE verification [in April 2025], [Norton Rose Fulbright] will drop from a level one (135%) BBBEE contributor to a level six (60%). This will, in turn, severely affect its ability to attract local clients and all but extinguish its ability to obtain work directly from the state,” Botha’s affidavit reads.
While the legal firm has decided to let go of the interim order challenge, it continues in its fight to have the legal sector code declared unconstitutional.
Botha said that the firm forwent the first part of the application because the ministry had “offered an expedited hearing of the main review application [second part]”
“We will withdraw Part A, but we persist with Part B. This is a welcome development, which is in line with our commitment to transformation in the legal sector and to the interests of the country.
“We remain open to engaging with all relevant stakeholders to ensure that the version of the LSC that is implemented is one that is both inclusive, achievable and viable, promoting meaningful change without creating undue barriers to compliance,” he said.
“While we have been intentional in our own transformation journey, recognising the constraints within the legal profession, and are committed to our role in ensuring that enduring change is achieved, we remain of the view that, in its current form, the LSC is unconstitutional, unimplementable and will not achieve the very objectives it seeks to achieve.”
Tau’s office did not respond by the time of publication.
Black Business Council (BBC) CEO Kganki Matabane described NRFSA’s legal challenge as a “right-wing opposition”. The council is an independent membership-based organisation for lawyers.
“The legal sector code is an important intervention to transform the legal sector, which like other sectors in the economy, are still characterised by structural inequality inherited through apartheid. Economic transformation at its heart, is about ensuring equality for black people,” he said.
“Opposing transformation is effectively arguing for the status quo — structural inequality to remain. Norton Rose and AfriForum’s opposition to the legal sector code should be seen in this light and must be condemned. We urge ministers Parks Tau and Mmamoloko Kubayi to defend the right of black lawyers to access the same work as white law firms.”
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