Major law firms challenge new Legal Sector Code aimed at transformation.
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FOUR major South African law firms challenge the newly-implemented legal sector code of good practice, sparking a national debate on race, transformation, and the future of legal professionals in a changing industry.
The legal sector code, brought into effect in 2024 under the broad-based black economic empowerment (B-BBEE) framework, seeks to accelerate transformation within the legal profession, long criticised for remaining dominated by white ownership and leadership structures more than three decades after the end of apartheid.
At the centre of the controversy is a target requiring large law firms to achieve 50% black ownership within five years, with 25% of that ownership specifically allocated to black women.
Supporters argue the code is a necessary intervention to address historic racial exclusion and unequal access to economic participation.
However, critics argue that the measures are unconstitutional, economically coercive and practically unworkable in a profession where partnership structures are built over decades rather than years.
Yolanda Celeste Akram.
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A profession still grappling with transformation
Attorney Yolanda Celeste Akram said the legal sector code emerged from longstanding concerns about the slow pace of change within the profession.
“The legal sector code of good practice forms part of the broad-based black economic empowerment (B-BBEE) framework aimed at addressing the racial and economic inequalities created by apartheid."
Akram said the code’s purpose extended beyond symbolic representation.
“It is intended to broaden participation in ownership, management, procurement opportunities, skills development, and access to the legal profession for historically-disadvantaged groups.”
Akram acknowledged that the implementation of rigid ownership targets had generated significant concern throughout the profession.
“Firms that wish to remain competitive in government procurement and maintain strong B-BBEE ratings will inevitably have to consider race in recruitment, partnership progression, and ownership structures.”
However, she stressed that South Africa’s Constitution expressly permitted affirmative action and remedial measures.
“Section 9(2) of the Constitution recognises affirmative action and remedial measures as legitimate tools to achieve substantive equality.”
Still, Akram warned that constitutional problems could arise if transformation policies became inflexible or punitive.
“The legal question is therefore not whether transformation itself is constitutional, but whether specific implementation mechanisms are reasonable, balanced, and practically achievable.”
One of the most contentious aspects of the legal sector code is whether participation is genuinely voluntary.
Akram explained that although firms were not legally prohibited from operating without compliance, the commercial realities of the legal market created immense pressure.
“The code does not automatically shut firms down or revoke their right to practise law. However, non-compliance can significantly affect a firm’s B-BBEE rating.”
She said poor ratings could jeopardise access to government work, corporate procurement opportunities and panel appointments.
“The government is one of the largest purchasers of legal services in South Africa. This is why many firms argue that although the code is technically voluntary, it becomes economically coercive in practice because of the realities of the legal market.”
The legal challenge against the code has reopened wider national debates over whether B-BBEE remains the best mechanism for addressing inequality in South Africa.
Akram said the debate was no longer about whether transformation was necessary, but how it should be implemented.
“The future of the legal profession should not be reduced to a simple debate between transformation and merit. South Africa ultimately needs a profession that is both representative and excellent; and one that creates genuine opportunities while preserving professional standards, constitutional values, and long-term sustainability.”
Karthy Govender Professor Karthy Govender.
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Constitutional questions around race and merit
Constitutional law expert and former acting judge Professor Karthy Govender said the Constitution clearly allowed affirmative action, but warned that implementation must remain flexible and carefully designed.
“The affirmative action provision in the Constitution is quite clear that affirmative action is permissible in terms of the Constitution to advantage previously disadvantaged persons,” Govender said.
He noted that courts had consistently held that affirmative action measures must be supported by a proper plan and could not amount to rigid racial quotas.
“What the courts have held is that you have to have a plan, an affirmative action plan,” he said.
Govender referred to Constitutional Court jurisprudence, explaining that suitably-qualified people must still be considered, and that rigid quotas were unlawful.
“They mentioned that suitably qualified people have to be appointed. In other words, there has to be some evaluation of the merits, and they mentioned that you cannot have quotas. What you can have is flexibility.”
He said one of the key issues likely to arise before the courts would be whether the legal sector code imposed inflexible demographic targets that effectively operated as racial quotas.
Govender also raised concerns about the dignity implications of race-based exclusion.
“Some of these measures adversely impact the dignity of people who are being disadvantaged by it,” he said.
“When people are making these policies and laws, they must understand that a child who is told, ‘we can’t employ you, not because of your abilities, but because of your race’, has a serious impact on their dignity.”
He argued that policymakers should increasingly consider individual socio-economic disadvantages rather than race alone.
“Ideally, we should be moving away from group-based affirmative action to individual-based affirmative action,” Govender said.
“If my son has had all the benefits of good education, that should be a factor taken into account versus someone that comes from an environment where no one in the area has gone to university.”
Govender argued that race-based policies could unfairly exclude qualified candidates, and sometimes benefited politically-connected elites rather than the poor.
He urged policymakers to avoid rigid approaches that ignored individual realities.
“There must be discretion as opposed to rigidity,” he said.
Shamla Pather.
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“A tick-box exercise”
Durban attorney Shamla Pather delivered a scathing criticism of the legal sector code, describing transformation in many firms as superficial and driven largely by procurement incentives.
“Transformation has happened, but not practiced. It is a tick-a-box exercise.
“I have watched hires based only on race. I have seen partners appointed based on race. I have experienced the unfairness of the system. I have also been a victim of exploitation on being a woman and an Indian. Had I not had the strength, experience, and tenacity to succeed and work hard, I would be a dying breed in the profession.”
Pather, who has spent 28 years in practice and served as a senior partner at two major KwaZulu-Natal firms, said B-BBEE compliance often became a commercial strategy rather than a meaningful commitment to empowerment.
“Many big firms are hiring people of colour so that they can tick their B-BBEE boxes, and so they get awarded tenders and contracts. Smaller firms stand no chance, as they do not have the resources the big firms have, to hire.”
Yet, despite her criticism, Pather acknowledged the historical inequalities that gave rise to transformation measures.
“I think that the socio-economic distinction that exists, makes this a necessity. Fairness does not even come into play. The fear is that if the code was not implemented, then we may go back to job reservation where 80% of the population have access to 20% of jobs.”
At the same time, she questioned the psychological and ethical impact of race-based appointments.
“What sense of pride will that invoke in a lawyer? You will be a hire based on your race, not your academic prowess or hard work.
“The forcing of the implementation of the code ticks boxes, but it does nothing for the human spirit, ethics and the profession.”
Pather said many firms would likely respond by reducing hiring or restructuring to avoid compliance burdens.
“Medium firms will relook at their structure; and possibly scale down and hire less. The fact of the matter is that we are faced with so much employment legislation that often practitioners feel that they should not employ young candidates when they can work less, earn more and not deal with this red tape.”
Pather also highlighted concerns, describing what she called a frantic scramble for compliance among firms seeking state contracts.
“I have had firsthand experience at the frenzy that firms go through, to comply just for this work. They hire the best in the industry to secure their compliance.”
Pather said she did not owe her success to B-BBEE.
“I can say I made it, but it had nothing to do with any handout from any government institution. I am Indian and female, and all I did was give points to those that I worked for. The return was not sweet. Personally, B-BBEE did nothing but exploit me, as it will the others that come after me.
“Legislation is being pushed down the throats of employers. Enough is enough. I was a victim of this legislation. It breaks one and it also takes from those that deserve it. Everyone needs a chance, and they all need to be on equal footing,” she said.
Pather painted an even darker picture for young graduates attempting to secure articles.
“I have employed three candidate attorneys who could not get articles for close to a year, post-graduation. They were desperate, and prepared to work for free.”
She said she regularly received applications from unemployed graduates, but remained constrained by Legal Practice Council quotas.
“The road ahead is not going to be kind, and I will not encourage students to pursue a legal career in this climate. It is tough, stressful and filled with ingratitude, huge sacrifices, image based and toxic. Now, it is race driven.”
Willene Holness, Associate Professor at the University of KwaZulu-Natal’s School of Law.
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Young graduates facing a harsh reality
The controversy surrounding the legal sector code has intensified fears among law graduates already struggling to enter the profession.
Willene Holness, associate professor at the University of KwaZulu-Natal’s School of Law, said the legal sector was already oversaturated long before the introduction of the code.
“The legal profession is relatively saturated resulting in some law graduates not obtaining vocational training opportunities.
“Those who obtain articles or pupillage are not guaranteed a position as an attorney once admitted to the profession, or a stable income as a junior advocate.”
She said the challenges affected graduates across all racial groups, but disproportionately impacted black graduates, women and persons with disabilities because of the profession’s slow pace of transformation.
“The legal sector transformation debate is crucial to highlight the dire need for intentional measures towards securing sustainable transformation of the legal sector,” she said.
However, Holness cautioned that numerical targets alone would not solve deeper structural problems.
“A blunt instrument to attain transformation on its own within a short period is unlikely to be successful if other structural and systemic barriers are not addressed.”
She said sustainable reform would require mental health support, mentorship, disability-inclusive policies, work-life balance protections, and early career support systems.
“The traditional legal profession must recalibrate to allow the diversity of our law graduates to flourish. That recalibration will require more than strict legal compliance with set targets.”