Major South African Law Firms Challenge BEE Code in Bid for Sector Stability

In a significant legal move, three of South Africa’s major law firms – Bowmans, Webber Wentzel, and Werksmans – have announced their decision to intervene in the legal proceedings led by Norton Rose Fulbright (NRF) to challenge the government’s Broad-Based Black Economic Empowerment (BEE) legal sector code. The firms argue that the newly introduced BEE code, published by the Department of Trade, Industry and Competition (dtic) in September 2024, sets unrealistic and impractical targets for the legal profession.

These firms, which currently hold Level 1 B-BBEE ratings under the Generic Codes, express concern that the legal sector code would significantly lower their ratings from Level 1 to Level 6 or even lower, making it harder for them to maintain their commitment to transformation.

The Legal Sector BEE Code: Unfair Expectations?

The BEE code mandates that 50% of black legal practitioners must hold ownership, voting rights, and executive management positions within the next five years. However, Bowmans, Webber Wentzel, and Werksmans argue that this is problematic, given the unique nature of the legal profession. Law firms operate as complex commercial businesses within a regulated industry, and the timeline for meeting these targets overlooks the time it takes for junior lawyers to progress to equity partners – typically 10 to 11 years.

The firms contend that forcing the implementation of these changes within five years would undermine the stability of the legal profession, hinder the training and development of junior lawyers, and ultimately impact the long-term transformation of the sector.

Calls for Revision of Implementation Timelines

The three law firms emphasize the need for a more balanced approach. In their joint statement, they stated that revising the timelines for achieving black ownership targets would allow firms to meet transformation goals effectively while ensuring stability within the sector. This approach, they argue, would foster an environment that enables junior lawyers to receive proper training and progress to senior roles without the undue pressure of meeting unrealistic targets.

NRF’s Initial Legal Challenge

Norton Rose Fulbright (NRF) first initiated legal action in January 2025, arguing that the new legal sector BEE code imposes unreasonable demands on law firms. While NRF later withdrew its bid to block the code, it made clear that it would continue to oppose the code, calling it unconstitutional and unimplementable.

The legal challenge against the BEE code has drawn support from several experts, including BEE consultant Paul Janisch, who believes the case has a strong chance of success. He argues that the dtic has failed to conduct a proper analysis of the legal sector, making the proposals unfit for implementation.

A Call for Practicality

As the legal challenge progresses, the legal industry’s key players are calling for evidence-based, practical changes to the legal sector BEE code. The outcome of this case will have far-reaching implications for South Africa’s legal profession and its broader transformation agenda, highlighting the need for more tailored, realistic solutions to achieve meaningful empowerment.

The intervention of Bowmans, Webber Wentzel, and Werksmans underscores the ongoing debate around BEE policies and their effectiveness in transforming South Africa’s industries. It also signals the importance of maintaining a balance between economic empowerment and sector stability.

{Source The Citizen}

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