The government’s policy on the transformation of the legal sector came under more pressure on Monday with three other large firms joining the fight.
The firms argue that its implementation could cause them to lose billions in contracts with big banks and the public sector.
Law firms Bowmans, Webber Wentzel and Werksmans applied to the high court in Pretoria on Monday to intervene in the legal challenge initiated by Norton Rose Fulbright SA (NRF) against trade, industry & competition minister Parks Tau.
The law firms want the implementation of the broad-based BEE legal sector code, which replaces the generic BEE code policy, to be reviewed and declared unconstitutional.
The policy was implemented last year to ensure black practitioners have strengthened ownership of law firms.
Under the new policy, large firms have been handed targets to increase black ownership, management control and procurement. The legal sector code requires law firms to achieve 30%-50% of black legal practitioners to be equity directors in the next five years.
The four firms fall under the large firms criterion because they generate more than R25m annually and due to their employment base.
Webber Wentzel has more than 850 staff members, Bowmans has over 750, and Werksmans has 127 partners, 73 senior associates and associates, as well as 47 candidate attorneys and professional nonlawyers with a range of qualifications.
The application by the law firms has been opposed by Pan African Bar Association (Pabasa) led by former deputy director of public prosecutions Nomgcobo Jiba and the Black Lawyers Association (BLA).
BLA argues the policy is important to address injustices of apartheid policies which created inequalities in the country’s socioeconomic landscape.
“The vision of the [code] is to transform the legal sector to give effect to the objectives of the constitution of promoting effective and sustainable economic participation in the general economy of SA and in particular, the legal profession,” BLA court papers read.
The three firms, however, contend the legal sector code should be amended because it “threatens” law firms’ sustainability in SA.
“This application is brought reluctantly. However, the applicants [the three law firms] have no real option but to bring this application, as the legal sector code is not only unconstitutional and unlawful but will materially and adversely affect the applicants in ways that threaten their sustainability,” the law firms’ court papers read.
Bowmans, Webber Wentzel and Werksmans make the same argument as Norton Rose Fulbright that when rated under the new legal sector code criteria the firms will lose their top BBBEE status.
The firms contend this would adversely affect their ability to procure work from both public and private sector entities because of possible poor BBBEE ratings.
The law firms are hired by the state and are paid millions of rand.
The firms argue it would be impossible to meet the legal sector code requirements within the set timelines.
“The timeline for the achievement of the code’s black ownership targets is problematic, with the legal sector code doubling black ownership targets to 50% by year five,” the firms said.
“This fails to recognise that in the legal sector, only practising lawyers in a firm can be owners. They are personally liable for the debts of the firm, and retain ownership until retirement.
“Junior lawyers follow a structured progression path that generally takes 10 to 11 years before becoming equity partners.”
The law firms have proposed a revised implementation of timelines which would allow firms to meet transformation goals.
They argue the legal sector code puts them at risk of losing major contracts with banks.
“The banks reserve the right to determine the minimum BBBEE accreditation required of the firm and, in the event of the firm failing to sustain this accreditation, to ‘terminate this agreement at any time’,” the law firms’ papers read.
The firms are also fighting the policy because it does not consider employees who are not legal practitioners in the ratings.
“The three law firms collectively employ more than 680 nonlawyers in SA, with a range of professional qualifications and across various management positions.
“Of the 220 nonlawyer managers, 108 (49%) are black nonlawyer managers, under the current management control measure of the generic scorecard.”
Despite initiating the legal challenge, the firms insisted they were not against transformation in the legal sector.
“The applicants have been at the forefront of the initiatives to achieve a representative legal profession. The applicants are all Level 1 BBBEE compliant entities.”
The firms raised concerns that the legal sector code “compromises the long-term viability” of their firms.
“The legal sector code risks disrupting and obstructing genuine transformation efforts, reducing competitiveness, undermining the rule of law, and compromising the long-term viability of the applicant firms and their contribution to the legal sector,” the court papers read.
They argue the legal sector code poses significant risks, not just to the legal profession but to the broader economy and the country’s transformation agenda.
“It threatens to weaken the autonomy of law firms and the country’s legal infrastructure at a time when it is crucial for supporting economic growth, foreign and domestic investment and supporting the rule of law.”
Update: April 8 2025
This story has been updated.
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