LEGAL SECTOR B-BBEE CODE GAZETTED AND IN FORCE

LEGAL SECTOR B-BBEE CODE GAZETTED AND IN FORCE

• 20 September 2024
• Broad-based Black Economic Empowerment
• SA Legal Academy

A broad-based black economic empowerment (B-BBEE) code of good practice for the legal sector has been gazetted and is now in force. Its implementation will be monitored by a yet-to-be-established charter council.

According to paragraph 38.2 of the 70-page document:

• a B-BBEE generic code certificate ‘validly issued’ before the new code’s commencement will continue to apply until that certificate expires, in anticipation of which the measured entity concerned should apply for a B-BBEE verification certificate under the new code, and
• legal sector entities not already measured for B-BBEE compliance and certified will be assessed using the new code.

The code’s publication and commencement comes seven days after Trade, Industry & Competition Minister Parks Tau issued a media statement announcing its approval under the B-BBEE Act, 2003. As SA Legal Academy reported at the time, the statement included a list of key legal sector transformation targets prescribed by the new code:

• 50% black ownership over 5 years, 25% of which should be black women ownership
• ‘a management control (executive and board participation) target of 50% representation of black practitioners and a target of 25% for black women practitioners, particularly as equity partners and associates’
• ‘a skills development target of 3.5% expenditure on training programmes for black candidates’, and
• ‘a procurement target of 60% by the private sector … (with) a target of 80% to be achieved through the specialised procurement scorecard applicable to the public sector’.

Regarding the code’s development, the gazetted document notes that there were found to be ‘sufficient common commercial and professional characteristics in the legal sector to make it feasible and appropriate to develop a sector-specific code to address … (its) unique characteristics’. Reliance on generic codes to assess the B-BBEE compliance of measured legal sector entities has apparently created a ‘gap’ the new code is expected to close.

Initiated in 2020 by the Legal Practice Council, the process of developing a legal sector code was informed by widespread stakeholder consultation and among other things drew attention to the importance of:

• ‘improving the availability of quality legal services’ by ensuring the provision of continuing and sustained legal training, skills development and education, among other things through ‘quality in-service training and learnership opportunities’, thus
• ensuring the development of ‘a body of well-trained and competent providers of legal services … to enable equitable appointments … to the judiciary’.

According to the new code’s preamble, under the generic codes there have been ‘pockets of improvement’. However, despite an increase in the number of admitted black legal practitioners ‘there are still insufficient black-owned law firms ... (able to) compete in size, scale and service offerings with ... large traditionally established, majority white-owned law firms’.

As the ‘robust intervention’ thus deemed necessary, the code seeks to:

• ‘implement more effective interventions in certain elements of the scorecard’, and
• ‘ensure that incentives for innovative and progressive (code) implementation … in a unique manner are promoted, encouraged and protected’.

Please click the links below for more information:

• code of good practice (alternative link)
• SA Legal Academy report on earlier ministerial announcement (media statement included)

Published by SA Legal Academy Policy Watch

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