A NEW ERA FOR SOUTH AFRICA’S LEGAL SECTOR Proactively embracing the Legal Sector Code By Ginen Moodley, Founder of Moodley Attorneys Inc.
While there has been a lot of debate around the amendments to the Legal Sector Codes, not enough discussion is happening about the spirit and intent behind the legislation and how organisations diversify their supplier base.
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he updated Broad-Based Black Economic Empowerment (B-BBEE) Legal Sector Code, gazetted on 20 September 2024, took immediate effect, requiring law firms and legal professionals to comply without delay. The updated B-BBEE Code for the legal sector introduces new revenue thresholds and compliance requirements aimed at accelerating transformation.
FKEY CHANGES INCLUDE: • Exempt Legal Entities (ELEs): Law firms with an annual turnover below R5-million are exempt from most B-BBEE requirements • Qualifying Small Enterprises (QSEs): Black-owned law firms with a turnover between R5-million and R25-million may
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simply submit a sworn affidavit confirming ownership • Large Entities: Law firms with revenue above R25-million – and advocates earning over R15-million – must comply fully with the B-BBEE scorecard To fast-track black ownership, the Code introduces a fiveyear target: 50% black ownership, with at least 25% of that belonging to black women. Law firms are also expected to reflect this ownership structure at the senior management and board levels. In addition, firms must invest 3.5% of their annual payroll in skills development for black legal professionals. Procurement must prioritise black-owned businesses, and law firms are encouraged to contribute to the Legal Sector Transformation Fund (LSTF), which supports black practitioners – especially women and historically disadvantaged individuals. A NEW ERA FOR SOUTH AFRICA’S LEGAL SECTOR While these changes bring stricter compliance measures, they also create an opportunity for law firms to rethink their approach to transformation, supplier relationships and long-term industry sustainability.
