There is “no merit” in objections from the big law firms to the Legal Sector Code, a department of trade, industry & competition official said in a submission to minister Parks Tau last year.
The code, which came into effect in September, is meant to address the slow pace of transformation in the legal sector, which remains disproportionately white-owned and controlled. It sets ambitious broad-based BEE targets, including a 50% ownership by year five — the highest ownership target in any sector code, said law firm Norton Rose Fulbright (NRF) South Africa in its court papers.
NRF has said the code is unconstitutional, irrational and unlawful in several respects, and challenged it in court. Though the government is yet to file its answering court papers, the submission was one of the documents put into court in a bundle of more than 3,000 pages as part of the government’s “Rule 53 record” — all the documents relied on by Tau when he approved the code.
At the time of the submission, dated August 2024, the code was still in draft form. The department’s B-BBEE chief director Jacob Maphutha was requesting Tau’s approval for it to be gazetted, and it appears the minister was persuaded the code was sound. The final page is signed “approved” by Tau.
The Legal Sector Code discloses no analysis of this kind at all
— Brent Botha, CEO Norton Rose Fulbright SA
The bundle includes 2024 demographic statistics from the Legal Practice Council (LPC), revealing that the legal profession remained disproportionately white. White lawyers particularly dominated when it came to partner demographics in the “top six” firms and in the “large” law firms.
The bundle also reveals that former minister Ebrahim Patel had misgivings about the draft code — because of public says received from NRF, among others — and so delayed implementation.
In the past, the legal sector’s broad-based BEE compliance was measured in terms of generic codes — codes that apply where there is no sector-specific code. In its court papers, NRF said when a sector code deviated from the generic codes in terms of targets and weightings, these deviations must be justified “based on sound economic principles, sectoral characteristics or empirical research”.
NRF disputed that deviations in the legal sector code were justified on this basis. In its court papers, NRF CEO Brent Botha said justification required the deviations be based on proper research and data. “At a minimum”, he said, the drafters of the code should have conducted a factual analysis of the demographics of the legal profession.
The analysis would set targets and weightings “that are appropriately tailored to the transformational needs of the profession and that are realistically attainable”, said Botha. “The Legal Sector Code discloses no analysis of this kind at all.”
Patel had a similar concern, the bundle revealed. Maphutha’s submission said Patel had asked the Legal Sector Code’s steering committee “whether the deviations are supported by any material evidence based on either sound economic principles, sectorial characteristics or empirical research”.
Patel’s concerns were addressed, said the submission. When it came to ownership, higher targets were “warranted in view of insufficient transformation since [the] generic codes were first promulgated. Continuing disadvantage experienced by black legal practitioners is demonstrated by consultations, knowledge of steering committee members and research from the LPC relating to ownership patterns.”
The statistics from the LPC revealed that 48% of attorneys and 41% of advocates in SA were white. When it came to ownership, the dominance of white attorneys was even starker: At the “top six” firms, ownership by black attorneys averaged 25%, while in the “large” firms (firms with 15 or more partners), the average percentage of black ownership dropped to 22%.
It was only at small firms (less than three partners), where black lawyers dominated ownership; and even there only 53% of the partners at these small firms were black. Numbers significantly improved at associate level, with 59% of associates at the top six firms being black and 51% at the “large” firms.
The submission said that, since the top six firms had already achieved an average 25% black ownership, an increase of 5% over two years was “reasonable”.
And given that these firms were “doing well in relation to black associates … from which directors are ordinarily recruited”, the other targets could be reached within a reasonable time, according to the submission.
The draft code had also been amended to spread its targets over five years, and not three, as was earlier required in the draft published for comment, said the submission. “All the minister’s concerns have been adequately responded to,” said the submission, and all says received “adequately addressed”.
In its court papers, NRF said similar 2023 stats from the LPC were “manifestly unhelpful as a basis for informing the inquiry into appropriate and attainable targets and weightings”. NRF may supplement its grounds of review having now obtained the Rule 53 record.
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