Top law firms oppose Legal Sector Code that would revolutionise untransformed industry

Major law firms challenge new Legal Sector Code aimed at transformation. After three decades of democracy, South Africa’s legal profession remains among the least transformed sectors in the country. The introduction of the new Legal Sector Code (LSC) is intended to move the industry beyond symbolic compliance and drive real structural change within a multibillion-rand profession.

The LSC was gazetted in September 2024 with the intention to accelerate transformation and increase black ownership, management control, and equity in the country’s legal profession. Law firms and private entities are expected to procure at least 60% of their legal services (including briefings of advocates) from black practitioners. The State and its institutions are expected to procure 80% of their legal services from black-owned Legal Sector Measured Entities.

The LSC replaces generic B-BBEE frameworks with mandatory, industry-specific targets designed to make transformation a business-critical priority. Within five years, large firms are expected to reach 50 percent black ownership, with 25 percent specifically held by black women, a major increase from previous benchmarks. Law firms with turnovers below R5 million and advocates who generate an annual R3 million turnovers will be exempt, deemed automatically compliant.

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This shift from voluntary compliance to enforceable transformation signals a watershed moment in South Africa’s legal landscape. However, the introduction of the LSC has elicited significant pushback from some of the country’s largest law firms, including Deneys-Reitz, Webber Wentzel, and Werkmans. These firms are challenging the LSC, asserting that its scope is too narrow and primarily targets large firms, which constitute less than five percent of the profession—leaving the greater part of practitioners untouched.

They argue that the code is potentially unlawful, unworkable, and could inadvertently hinder genuine transformation efforts. A legal battle is underway in the North Gauteng High Court in Pretoria seeking to set aside the LSC.

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