Similar to other sectors such as the finance services sector, property sector and so on, the Department of Justice and Constitutional Development saw it fitting to also develop and issue Sector Codes for the legal industry. The aim and objective of the Legal Sector Code (“LSC”) is to transform the legal sector in order to give effect to the objectives of the Constitution of promoting effective and sustainable economic participation by black people in the general economy of the Republic of South Africa and, in particular, the legal profession. Therefore, the LSC further aims to address inequities resulting from the systematic exclusion of Black people from meaningful participation in the economy to access South Africa’s productive resources, economic development, employment creation and poverty eradication.
According to research conducted in 2014 by the Centre for Applied Legal Studies and the Foundation for Human Rights, it was established that “South Africa’s corporate law firms are still dominated by white men, especially in the upper echelons: 80 percent of the chief executives of the 12 firms canvassed in the survey were white men, as were 72 percent of all managing partners. The picture at the CEO/managing partner level was replicated in the ownership and remuneration structures of the firms: 53 percent of all equity partners were also white and males.”
Taking cognisant of the fact significant progress has been made in restructuring and transforming our society and its institutions, systemic inequalities and unfair discrimination remain deeply embedded in social structures, practices and attitudes thereby undermining the aspirations and values underpinning the country’s constitutional democracy.
Statistics from Statistics SA show that in 2022 whites constituted 7.7% of the population and black people 92%. Statistics from the Legal Practice Council as of April 2023 shows that in large racially mixed law firms (15 or more partners) 72% of the partners/directors are white and, on average, 25% are black. At the associate level in the same firms, there has been more progress with 59% black and 40% white associates. With regard to professional assistants, whites constitute 57% and black professional assistants 43%. Furthermore, A 2021 LexisNexis study confirms the LPC’s statistics in relation to the ownership structure of mixed firms. It was found that in such firms, over half the white owners own more than 75% of the firms whilst 74% of the black practitioners is limited to less than 25% ownership. These figures demonstrate the effects of discrimination. A further expression of such discrimination is the fact that 2023 LPC statistics show that the largest majority black-owned firm has only 18 directors. In contrast, the largest majority white owned law firm has 396 partners and the smallest among such larger firms has 79 partners. It is the limited access to a sustainable flow of quality instructions that prevent black practitioner from building firms that can compete with large majority white-owned law firms. The findings show that black practitioners employed in racially mixed firms in the legal sector continue to experience significant structural and systemic discrimination and inequality.
There is therefore a need for a sector-specific code that will take cognisance of the unique characteristics of the legal profession and include sector-specific interventions that will be more effective in achieving equality and economic opportunities for black practitioners, thereby contributing to the growth of the profession and the economy as a whole. The development of the LSC should be seen in this context as well as in the context of the legal profession as one of the cornerstones of a constitutional democracy.
The objectives of the LSC are to facilitate the transformation of the legal sector to ensure that it is representative of the demographics of South Africa, ensuring that a body of well-trained and competent providers of legal services are developed and also to enable equitable and representative appointments to be made to the judiciary.
In addition, the LSC seeks to eliminate barriers of entry and provide equal opportunities by empowering Black practitioners, especially persons from designated categories through ensuring equal participation in the economic opportunities within the legal sector, and also by implementing measures to address the provision and availability of pro bono services and community-based legal services, thus ensuring access to affordable legal services for all people in South Africa, particularly marginalized, poor and rural communities.
The unique features and strategic objectives of the LSC are, inter alia, as follows:
- The LSC is premised on the recognition that a B-BBEE measurement framework in the legal sector is necessary to address transformation as a whole, B-BBEE in general, the promotion of black practitioners, as well as the need for a significant increase in the fair and equitable procurement of quality and specialised areas of law from black practitioners by both the private and public sectors.
- The LSC seeks to achieve a substantial, meaningful, and accelerated change in the racial and gender composition of ownership, control and management of legal practices in the legal sector.
- promoting employment patterns in the sector that adhere to the principles of non-racialism and non-sexism by addressing the underrepresentation of black practitioners.The LSC seeks to address the prevailing shortage and lack of relevant skills and increasing the skills pipeline with the aim of accelerating the advancement of black legal practitioners, black women legal practitioners and practitioners from designated categories, including legal internships, employment of candidate attorneys and pupils with specific reference to legal and management skills.
- LSC seeks to increase the procurement of legal services from the private and public sectors by LSMEs that are at least 51% black owned and/or 51% black women owned.contributing to the creation of sustainable LSMEs that are majority or wholly owned by black legal professionals through effective enterprise and supplier development initiatives.
- increasing ongoing qualitative and quantitative methods for monitoring and evaluating progress towards realising the goals of this LSC and B-BBEE in general and thereby contributing to measures that eradicate fronting and other mechanisms for circumventing such goals.
- It should be noted that notwithstanding the date of gazetting, clause 38.2 of the LSC provides that all B-BBEE verification certificates which were validly issued in terms of the Generic Codes, prior to the gazetting of the LSC, shall remain valid and applicable for the period of their validity. This means that law firms will only need to be measured in terms of the LSC after the expiry of their current B-BBEE verification certificates. In simple words, law firms will only be required to comply with the LSC after expiry of their B-BBEE certificates.
Legal Practitioners who elect to be measured in terms of the B-BBEE Act are urged to familiarise themselves with the provisions of the LSC.
