By Lehlohonolo Lehana.
Major South African law firms (Bowmans, Webber Wentzel, Werksmans, and Norton Rose Fulbright) are challenging the new B-BBEE Legal Sector Code (LSC) in the Gauteng High Court.
The law firms are arguing that the 50% black ownership target within five years is unlawful, irrational, and unworkable.
The firms support transformation but argue the Sept 2024 code risks harming the profession, while the case also tackles insufficient consultation and the exclusion of smaller firms.
Advocate Tembeka Ngcukaitobi, on behalf of the other three law firms, argued that the current LSC is fundamentally misconceived in design and effect, and that it will hinder rather than advance meaningful broad-based transformation.
He pointed out that it exempts more than 95% of legal practices from its requirements.
Legal entities with between one and three partners make up 95.07% of legal practices, yet the LSC does not apply to them because they fall below the turnover threshold for compliance.
The firms argue that a code that applies to less than 5% of the profession cannot credibly transform the sector as a whole.
Ngcukaitobi said if the LSC is allowed to stand, those most likely to lose are the people and institutions that rely on practical, broad-based pathways into the legal sector, including black law students, young graduates, black professionals in management, persons with disabilities, and the public-interest organisations that expand access to justice.
The firms also challenge the LSC’s treatment of management and ownership. They argue that it wrongly excludes black non-lawyers from management control scoring, even though black non-lawyers serve in critical senior management and leadership roles in law firms.
The B-BBEE Act requires the minister to issue a B-BBEE strategy to guide sector codes. But no such valid strategy was issued in this case, meaning that the LSC was developed and promulgated without the necessary legal foundation, the court was told.
Ngcukaitobi concluded that the court must strike the code down, as it cannot rewrite it or try and fix what is wrong.
A counsel for the minister of trade and industry, Parks Tau, on Wednesday defended the LSC as a constitutional obligation aimed at advancing transformation in the legal profession, arguing that the process followed all legal requirements and that transformation in South Africa was “non-negotiable”.
Adv Fana Nalane SC told the court the framework was rooted in the Constitution and formed part of South Africa’s broader commitment to redress historical injustice and exclusion.
“Transformation in this country is non-negotiable,” Nalane argued. “It is written in the DNA of this country. It is also embedded in our social contract, Constitution.”
Nalane argued that the case before the court was not about whether the applicants preferred a different version of the code but whether the minister had acted lawfully and within the powers granted to him by legislation.
“The court is not here to decide who is right and who is wrong,” he said.
Nalane also told the court that the LSC established specialised structures to oversee implementation and interpretation of the framework, rather than leaving those functions solely to government.
The matter is scheduled to be heard from Monday, 4 May to Friday, 8 May.
The Black Conveyancers Association (BCA) has come out strongly against the legal challenge, describing it as an attempt to block measures aimed at transforming the profession. It says it will intervene in the case to defend the LSC, which it views as “a necessary and urgent intervention to ensure a fairer legal profession”.
The association argues that opposition to the code reflects an effort by large firms to preserve their dominance, alleging they “seek to maintain and reinforce structural and economic apartheid even as they claim to support transformation”.
It added that without the code, most black practitioners remain excluded from meaningful opportunities, with “most black lawyers and advocates … forced to the margins of the profession, where they struggle to survive”.
Meanwhile the Democratic Alliance’s (DA) proposed replacement of the BBBEE framework is heading to Parliament for its first reading on 7 May.
Dubbed the Economic Inclusion for All Bill, the DA plans to repeal all race-based preferences for procurement and create a new system that offers incentives for tangible development outcomes.
“There is no question that redress remains a national imperative. But, after 30 years, BEE has failed to deliver meaningful inclusion,” the DA’s head of policy, Mat Cuthbert, said. Instead, it has enriched a politically connected few, while millions remain locked out of real economic opportunity.”
The DA’s points-based system aims to reward companies for doing what South Africa needs most – jobs, investment in infrastructure, skills development, and support for small businesses.