| 7.1. | According to research conducted in 2014 by the Centre for Applied Legal Studies and the Foundation for Human Rights, it was established that: |
“South Africa’s corporate law firms are still dominated by white men, especially in the upper echelons: 80 percent of the chief executives of the 12 firms canvassed in the survey were white men, as were 72 percent of all managing partners. The picture at the CEO/managing partner level was replicated in the ownership and remuneration structures of the firms: 53 percent of all equity partners were also white and males.”1
| 7.2. | In research for his Master’s in Business Administration programme, titled South African Broad-Based Economic Empowerment and the Provision of Legal Services in the Financial Services Sector2, submitted to the Faculty of Commerce, Law and Management, of the University of the Witwatersrand, in 2018, Boitumelo Shalliam Phungwayo submits, on page 8, that: |
The systematic, structural and social-economic inequalities that were prevalent under the apartheid government distorted the ability of the people in accessing courts, legal services and legal work on the basis of race, gender and disability (Roopram, 2007). The socio-economic status and geographic location factors were further hindrances for black people from being able to gain access to legal services. In their media release on 29 November 2007, the co-chairpersons of the LSSA acknowledged “that although much had been done to improve the structural and systematic issues of the past; inequality and discrimination still prevailed in the new democratic dispensation” (Ramatlhodi, 2010). According to the meeting report shared at the LSSA briefing on legal profession transformation, statistics showed that there were 24% fully female-owned attorney practices, 60% fully male-owned practices and 9.1% practices which were gender mixed (Law Society of South Africa, 2007). Ramatlhodi (2010) in his briefing further advised that 80% of the practices were fully owned by whites, only 6.5% fully owned by Africans, 6.2% by Indians, 1.4% by coloureds and 6.5% had mixed ownership (Ramatlhodi, 2010).
| 7.3. | Phungwayo concludes on page 76 that: |
“The results of this research study illustrate deep structural challenges within the financial services sector in supporting the previously disadvantaged legal firms in accessing legal work and the promotion of their growth to becoming established businesses that will equally compete with their white counterparts. The results point to a need for robust transformation and reforms in both the banks and the government.
| 7.4. | Against this background, in 2007, prior to the establishment of the LPC, the Council of the Law Society of South Africa, developed and adopted a Legal Sector Charter as a Transformation Charter (“the Transformation Charter”) in terms of section 12 of B-BBEE Act. |
| 7.5. | The Transformation Charter represented a historic milestone in the pursuit of transformation of the legal profession. It came about as a result of an extensive process of consultations which culminated in the legal profession undertaking the responsibility for the drafting of the Legal Sector Charter (“the Legal Sector Charter”) in consultation with the DOJ&CD. The Legal Sector Charter stated that it embodies the profession's commitment to transformation and recognises that a strong, independent and representative profession is essential to ensure access to justice and to promote the Bill of Rights as contained in the Constitution. |
| 7.6. | The Legal Sector Charter recognised that whereas significant progress has been made in restructuring and transforming our society and its institutions, systemic inequalities and unfair discrimination remain deeply embedded in social structures, practices and attitudes thereby undermining the aspirations and values underpinning the country’s constitutional democracy. |
| 7.7. | Subsequent to the 2007 Legal Sector Charter, the LSSA held a summit in March 2016 titled “Summit on Briefing Patterns in the Legal Profession”. The summit expressed “its deepest concerns about the legal briefing patterns in the public and private sectors insofar as this endangers the constitutional democracy and insofar as there appears to be bias against black practitioners and women practitioners in these sectors.” |
| 7.8. | This, the summit indicated, flouts the principles of non-racialism and non-sexism as espoused in both the preamble and elsewhere in the Constitution. It also has a “a negative impact on the occupational progression of practitioners in these groupings and their economic wellbeing.” |
| 7.9. | The participants therefore concluded that meaningful action had to be taken by all stakeholders from the date of the summit and recommended strict accountability. One of the resolutions taken was to set up a task team made up of various stakeholders to initiate remedial steps. |
| 7.10. | The summit participants agreed on procurement protocols for the legal profession which were signed by several law firms. The signatories to the protocols: |
| 7.10.1. | recognised that apartheid introduced race- and gender-based discrimination which excluded black practitioners on the one hand and bestowed “unfair privileges” on white male practitioners on the other hand; |
| 7.10.2. | accepted that transformation initiatives to empower black and women practitioners have been met with some reluctance and resistance on the part of some of members of the legal profession and the broader industry; |
| 7.10.3. | acknowledged that black and women practitioners have not been treated in line with the foundational constitutional values of equality; the right to equal access; the right for everyone to choose and practice their profession freely; and |
| 7.10.4. | acknowledged that, objectively measured, the efforts of the legal profession to reverse the imbalances flowing from our past have failed to yield the desired transformation of the legal profession;3 |
| 7.11. | The signatories therefore undertook to, among other steps, promote the procurement of legal services from black and female practitioners, bridge the skills set deficits, and ensure black and female practitioners are included in the mainstream of practice. |
| 7.12. | The Generic Codes was first promulgated in 2007 and since then have been used by all sectors of the economy including those LSMEs that opted to be measured for their compliance with black economic empowerment. In 2015 the Amended Codes of Good Practice were gazetted. The Generic Codes are currently used by LSMEs. As the codes are inherently generic, provision is not made for the unique nature of a professional service sector such as the legal sector. For example, advocates cannot, because of the nature of their practice, be measured under ownership and management control. |
| 7.13. | The targets in the Generic Codes are the minimum as confirmed in paragraph 3.1.6 of Statement 003, yet no provision has been made for a progressive increase of such targets. |
| 7.14. | Black economic transformation is not a once-off event. It is intended to be a continuous incremental process until all systemic barriers are removed and a more equal society is enjoyed by all – including black practitioners. Furthermore, there is no monitoring mechanism in the Generic Codes to measure compliance and improvement towards this goal. |
| 7.15. | Statistics from Statistics SA show that in 2022 whites constituted 7.7% of the population and black people 92%. Statistics from the Legal Practice Council as of April 2023 shows that in large racially mixed law firms (15 or more partners) 72% of the partners/directors are white and, on average, 25% are black. At the associate level in the same firms, there has been more progress with 59% black and 40% white associates. With regard to professional assistants, whites constitute 57% and black professional assistants 43%. |
| 7.16. | A 2021 LexisNexis study confirms the LPC’s statistics in relation to the ownership structure of mixed firms. It was found that in such firms, over half the white owners own more than 75% of the firms whilst 74% of the black practitioners is limited to less than 25% ownership. These figures demonstrate the effects of discrimination. A further expression of such discrimination is the fact that 2023 LPC statistics show that the largest majority black-owned firm has only 18 directors. In contrast, the largest majority white owned law firm has 396 partners and the smallest among such larger firms has 79 partners. It is the limited access to a sustainable flow of quality instructions that prevent black practitioner from building firms that can compete with large majority white-owned law firms. |
| 7.17. | Current research confirms earlier research from 2010 onwards as well as the conclusions drawn by the 2016 LSSA Summit insofar as they relate to lack of transformation in the legal profession. The findings show that black practitioners employed in racially mixed firms in the legal sector continue to experience significant structural and systemic discrimination and inequality. |
| 7.18. | The research referred to above, the conclusions reached at the 2016 LSSA Summit, as well as the feedback from black practitioners during countrywide consultations by the Steering Committee, demonstrate that 16 years after its promulgation, the Generic Code has not been effective in promoting meaningful transformation and nor have any of the initiatives referred to above been successful in solving the problems experienced by black practitioners. |
| 7.19. | There is therefore a need for a sector-specific code that will take cognisance of the unique characteristics of the legal profession and include sector-specific interventions that will be more effective in achieving equality and economic opportunities for black practitioners, thereby contributing to the growth of the profession and the economy as a whole. The development of the LSC should be seen in this context as well as in the context of the legal profession as one of the cornerstones of a constitutional democracy. |
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| 1 | Transformation of the Legal Profession [2014] para 2 page 5. |
| 2 | South African Broad-Based Black Economic Empowerment and the Provision of Legal Services in the Financial Services Sector, Johannesburg, 2018, protocol number WBS/BA1738718/952. |
| 3 | Information on the Summit and Protocols for the Legal Profession can be accessed on www.lssa.org.za. |
