WATCH | Law firms take high-stakes fight over BEE legal code to court 

The transformation of the legal sector is key to empowering the judiciary, Black Lawyers Association president Nkosana Mvundlela said on Monday.

Mvundlela’s remarks came as the biggest legal challenge against the new government policy aimed at transforming the legal sector began in the high court in Pretoria.

The broad-based BEE legal sector code, aimed at addressing imbalances created by apartheid and promoting equal participation in the sector, was implemented in September 2024 and triggered the biggest battle yet in the legal fraternity.

Top law firms Norton Rose Fulbright SA, Bowmans, Webber Wentzel and Werksmans want the policy reviewed and declared unconstitutional. Trade union Solidarity has also joined the applicants seeking to have the legal sector code declared unlawful.

Should the applicants succeed, it will be a precedent-setting judgment overturning the first transformation policy created specifically for the legal sector.

The litigation was supposed to start on Monday before a full bench, consisting of judges Nicolene Janse van Nieuwenhuizen, Selemang Mokose and Annali Basson, but it was delayed until Tuesday for an open court hearing.

The matter was postponed to allow Solidarity’s case to be consolidated with those of the law firms.

The legal sector code, which was in the making in 2020-24, requires firms to increase black ownership, management, control and procurement.

It requires law firms to achieve 30%-50% of black legal practitioners to be equity directors in the next five years.

The code requires large law firms generating more than R25m per annum to have 30% of exercisable voting rights held by black legal practitioners in the first year, 30% of economic interest held by black legal practitioners in the first year and 15% of economic interest held by black women legal practitioners in the first year of assessment.

Mvundlela, among parties defending the legal sector code, described the policy as vital for safeguarding the transformation of the bench.

“The transformation agenda is extremely important. The legal profession is a feeder for the judiciary. The less transformed the legal profession, the more disempowered the judiciary can easily be,” he said.

“Transformation in the legal fraternity includes briefing patterns which must be empowering to members of the legal profession.

“That transformation includes the distribution of quality work to all; if we do not distribute work, you may end up with an untransformed and less empowered judiciary.”

Mvundlela, who is also vice-president of the Legal Society of South Africa, said all stakeholders were engaged by the Legal Practice Council in the drafting of the legal sector code.

“The fact that some of their views may have not been reflected in the codes does not make the code illegal or unacceptable,” he said.

“We do not see this litigation as a necessity; we believe the legal profession can do better to transform itself for the benefit of future lawyers and the country.”

National Association of Democratic Lawyers president Machini Motloung described the legal sector code as the correct vehicle to fast-track transformation in the sector.

“We are of the view the pace of transformation has been very slow. The legal sector code is fully operational to redress the imbalances of the past as far as the legal profession is concerned,” Motloung said.

The law firms argue the targets in the legal sector code would be “impossible” to meet within five years.

Motloung said the litigation by the firms could be seen as a move to protect “privilege”.

Norton Rose Fulbright SA, however, argues the case is not an attempt to preserve privilege or resist transformation in the legal profession. It supports the need for transformation but argues the legal sector needs a policy with “realistic targets”.

Motloung said: “Such arguments are presented to preserve a status quo and to resist transformation and necessary changes within the legal profession. To ensure the privileges that have always been there for the white law firms remain untouched, that is the real issue at play here.”

Senior attorney Maboku Mangena, who is also part of the Judicial Service Commission, disagreed with the firms that the targets set by the legal sector code are “impossible”.

“There is a need for transformation of the legal sector. Transformation of the legal sector and every section of society is a constitutional imperative. We support the need for transformation,” he said.

“I do not agree that [the targets] are impossible. These targets were agreed upon by the profession itself. These applicants who are now arguing the targets are impossible have made those arguments [during consultations], and they were taken into account. The general agreement was that they are reachable and possible.”

The legal bodies defending the legal sector code are confident the policy could stand the legal test before the high court.

Webber Wentzel, Bowmans and Werksmans, represented by advocate Tembeka Ngcukaitobi, make the same argument as Norton Rose Fulbright: when rated under the new legal sector code criteria, the firms will lose their top broad-based BEE status.

The firms contend this would adversely affect their ability to procure work from public and private sector entities because of possible poor BBBEE ratings.

“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.

The firms argue that the policy implementation could cause them to lose contracts estimated to be worth millions with big banks and the public sector because “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.

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.

Minister Parks Tau, the main defendant in the case, argues he followed all lawful procedures in approving the policy.

“The legal sector code was developed to achieve the objectives of the BBBEE Act in 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 South Africa’s productive resources, economic development, creation and poverty eradication in the legal sector,” he says.

He denies he ignored and failed to consider and address the concerns of his predecessor, former minister Ebrahim Patel, who left the office without signing the policy into law.

“Those concerns were addressed, and I was satisfied that the legal sector code should be gazetted.”

The case will be heard from Tuesday to Friday.