South Africa law firms ask court to quash industry equity code
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Some of South Africa’s biggest law firms have asked a court to set aside the nation’s policy governing Black ownership and representation in the profession, saying that its “unlawful” and “unworkable” in its present form.
The Gauteng High Court will hear the request to set aside the so-called Legal Sector Code, published by Trade Minister Parks Tau in September 2024, from May 4 to 8. Norton Rose Fulbright initially brought the legal proceedings to the court and Bowmans, Webber Wentzel and Werksmans have intervened.
The firms argue that the revised code removes recognition for several established measures aimed at so-called transformation — a local term for policies addressing apartheid-era exclusion through steps such as increasing Black ownership and staffing, and expanding skills development.
Among the concerns raised, the firms said the new code “wrongly excludes” Black non-lawyers from management control scoring, even though professionals in areas such as human resources, technology and accounting often hold critical senior management and leadership roles in law firms, Bowmans, Webber Wentzel and Werksmans said in a statement on Wednesday.
Under South Africa’s policy framework on economic empowerment, companies are rated on scorecards that look at Black South African representation in ownership and leadership, as well as what the firms do to promote the development of non-Whites’ skills and communities. The level on the scorecard affects companies’ eligibility for government contracts and their ability to do business with other corporates.
The firms propose that instead of implementing the LSC, the government allow the generic codes continue to apply to the legal procession “while a lawful, evidence-based and properly constructed LSC is developed.”
That would “avoid any regulatory vacuum while allowing the sector and government to produce a code that genuinely advances transformation,” they said.
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