Trade, industry & competition minister Parks Tau has defended his decision to implement a government policy aimed at the transforming the legal sector.
Tau promulgated the broad-based BEE (BBBEE) legal sector code, which replaces the generic BEE code policy, in September 2024 and triggered a legal battle with large law firms.
Law firms Norton Rose Fulbright SA (NRF), Bowmans, Webber Wentzel and Werksmans initiated the legal challenge and want the Pretoria high court to review and declare the legal sector code unconstitutional.
The firms argue the policy targets would be “impossible” to meet and could cause them to lose billions in contracts with big banks and the public sector.
The legal sector code requires firms to increase black ownership, management, control and procurement.
Tau, backed by the Pan African Bar Association of SA (Pabasa), led by former deputy director of public prosecutions Nomgcobo Jiba, the Black Conveyancers Association (BCA), National Association of Democratic Lawyers (Nadel) and the Black Lawyers Association (BLA), made no apologies for the higher targets in the legal sector code.
He filed his answering affidavit on Wednesday, six months after the initial application, in the case that promises to be one of the biggest legal sector battles yet.
While the big law firms argue that the generic code is reasonable and achieves transformation goals, Tau stresses the need for a legal sector code.
The code was in the making for four years before he approved the policy.
“The targets in the legal sector code are higher than the targets in the generic codes, but warranted in view of insufficient transformation since the generic codes were first promulgated,” he says in court papers.
The legal challenge comes amid long-standing complaints by black lawyers about the slow pace of transformation in the legal sector, particularly ownership of large firms generating billions.
In the legal papers it was estimated that the big five firms — Bowmans, Cliffe Dekker Hofmeyr, ENSafrica, Webber Wentzel and Werksmans — generated revenue of R1bn-R4bn.
Tau argues Norton Rose Fulbright SA’s application is bound to fail because the firm failed to join the Charter Council, which was formed by the justice ministry to oversee and implement the code.
He insists he followed all lawful procedures in approving the policy
“The legal sector code was developed to achieve the objectives of the BBBEE Act within the legal sector or legal profession.
“It is to address inequities resulting from the systemic exclusion of black people from meaningful participation in the economy to access SA’s productive resources, economic development, creation and poverty eradication, in the legal sector.
“I deny that I ignored and failed to consider and address the concerns of my predecessor. Those concerns were addressed, and I was satisfied that the legal sector code should be gazetted.”
Setting the legal sector fund aside would jeopardise the formation of the Transformation Fund, he argued. The R100bn transformation fund is intended to boost government’s transformation agenda and support inclusive growth.
“It would be a pity if the entire legal sector code would be reviewed and set aside, which would mean that the provisions relating to the establishment of a transformation fund would also be set aside,” he says.
“The legal sector code also proposes an establishment of the Transformation Fund that would be used for skills development and enterprise and supply development initiatives, including but not limited to funding of black-owned law firms.”
The minister criticises the firms for wanting the legal sector code to be set aside instead of challenging parts they had trouble with.
“This contradicts its claim that it supports transformation and the transformative element of the code.
“If applicants and those interveners who support transformation … only have complaints about certain aspects of the legal sector code … they would have isolated only those aspects and sought for them to be addressed and rectified to meet the complaints and not throw out the entire legal sector because of these complaints.”
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