Organisations representing black attorneys and advocates are gearing up to brawl it out with top law firm Norton Rose Fulbright (NRF) in a titanic battle that will determine how billions of rand generated by the legal sector are shared between white and black legal practitioners.

The looming battle was triggered by an application by Norton Rose Fulbright South Africa (NRFSA) to set aside -- as unlawful and invalid -- new government laws that aim to boost the share of wealth that flows into the hands of black legal practitioners.

NRFSA is a local arm of U.S. multinational law firm NRF that competes for legal work with the so-called Big Five Sandton law firms Bowmans, Cliffe Dekker Hofmeyr, ENSafrica, Webber Wentzel, and Werksmans. These law firms dominate and own a large share of domestic private capital in the legal sector.

Statista estimates that the legal sector generated around $4.9bn (R91.63bn) in revenue in 2023, but Grand View Research projects that $4.5bn (R84.15bn) was generated in 2023, with litigation accounting for a lion’s share of the revenue. This market was projected to grow at a compound annual growth rate of 7.7% from 2024 to 2030, raking in $7.6bn (R142.12bn) annually by 2030.

Now NRFSA, formerly Deneys Reitz, is fighting to protect its revenues from threats posed by the new laws. The primary target of the law firm’s legal action is Trade, Industry & Competition Minister Parks Tau, who in September last year gazetted new Broad-Based Black Economic Empowerment (B-BBEE) targets for the legal sector, which have replaced generic B-BBEE targets that have been in place for the last 17 years.

In its application, filed in December in the Pretoria High Court, NRFSA also cited the South African Legal Practice Council (LPC) as second respondent and Minister of Justice and Constitutional Development Mmamoloko Kubayi as third respondent - for backing the new B-BBEE measures, known as the Legal Sector Code (LSC).

New B-BBEE code a game changer

These long-awaited measures have been described by their proponents as a “game changer” that will tip the scales in favour of black practitioners, who were stifled by the generic B-BBEE code. That is why lobby groups representing black legal practitioners are jumping to LSC’s defence, with the Black Lawyers Association (BLA) and Pan African Bar Association of South Africa (PABASA) leading the fight.

The BLA and PABASA have also filed court papers to intervene as respondents opposing the lawsuit. In addition, the top leadership of the General Council of the Bar of South Africa (GCBSA) took a resolution to join the battle to repel the lawsuit.

Advocates For Transformation (AFT), an association that represents black advocates within the General Council of the Bar (GCBSA), are expected to follow the BLA and PABASA and intervene to resist the application. The AFT is a group of advocates within the GCB as opposed to PABASA which is outside or on equal footing with GCB.

“Currently, it is the AFT’s turn to lead the GCB on a rotational basis. It might be the reason why the GCB, which is traditionally an old boy’s white club, wants to repel the application. In a different year, like last year when GCB was mostly white led, I would not have expected the GCB to try to repel the application,” said an advocate, who asked to remain anonymous for fear of victimisation and ostracisation.

PABASA filed the notice to intervene in the matter on 15 January 2025 and followed up this step by submitting an affidavit on 22 January by Nomgcobo Jiba, PABASA’s national deputy chairperson, who reaffirmed support for LSC by the lobby group for black advocates.

“The relief sought by NRFSA seeks to maintain the status quo of overt and covert discrimination and fails to address the interests and aspirations of black female practitioners, to practice their chosen profession as advocates,” says Jiba in the affidavit.

Thabo Masombuka, senior legal practitioner and technical adviser to the Steering Committe that drafted the LSC, lambasted NRFSA for opposing the LSC, saying the law firm wanted the generic code reinstated because it helped it to do bare minimum to comply with B-BBEE.

“In essence, Norton Rose Fulbright is looking to earn B-BBEE points and receive empowerment recognition without committing to meaningful transformation that translates to the long-term benefit for black practitioners,” said Masombuka.

The bone of contention for the law firm is that the LSC’s targets for black ownership and preferential procurement are unreasonable and unattainable as they are higher than targets in the generic code.

For instance, the LSC requires law firms to be 30% owned by black people in year one of LSC implementation, and 50% black owned by year five. Black women ownership has also been revised upwards from 10% to 15% in year one and 25% in year five. Under the generic code, companies were required to sell 25% of their equity to black shareholders to be B-BBEE compliant.

Preferential procurement is another area where the bar has been raised high. The LSC requires law firms to source 40% to 60% of legal services from black advocates.

The LSC has a scorecard that takes into account the uniqueness of the legal sector. The scorecard measures large law firms and advocate practices differently from small law firms and advocate practices.

The small companies, known as qualifying small enterprise LSMEs (QSE), are essentially small law firms (attorneys) that generate annual revenue of between R5 million R25 million or advocate practices that generate annual revenue of between R3 million and R15 million.

Let’s start with the advocate practices, the LSC scorecard has only one element - skills development which allocates 50 points to practices that train up-and-coming advocates.

Then there is a dedicated scorecard for law firms, which has four elements, namely ownership (25 points), management control (24 points), skills development (15 points), and procurement, supplier, and enterprise development (PSED), which has a weighting of 45 points. For law firms that are categorised as QSEs, management control has a weighting of 20 points.

The elements contained in the LSC scorecard are different from the generic B-BBEE scorecard, which has five elements, namely ownership (25 points), management control (19 points), skills development (20 points), enterprise and supplier development (40 points), and socio-economic development (5 points). A closer comparison of the LSC and B-BBEE generic shows that the LSC has increased targets for black ownership, management control, and procurement.

The high LSC targets have caused serious panic in the corridors and boardrooms of NRFSA, whose executive directors fear the firm’s B-BBEE rating could be downgraded from Level 1 B-BBEE contributor to Level 6 following the implementation of the LSC. The downgrade could make NRFSA less competitive against bidders with higher B-BBEE ratings when bidding for lucrative legal tenders.

But black lobbyists say change was long overdue as generic code’s targets were low and had failed to transform the sector. Figures released by the Legal Practice Council (LPC) in April 2023 show that progress in transforming the sector has been slow, particularly at large racially mixed law firms with 15 partners or more.

About 72% of partners or directors in these firms are white and 25% black. At associate level, 59% of associates were black and 40% white. From the LPC’s research it also emerged that blacks struggled to build law firms that compete with large white-owned firms because of limited access to steady flow of quality instructions. Blacks were also starved of private sector work and state institutions and state-owned enterprises were inconsistent in supplying them with regular work.

Discriminatory briefing patterns

To add salt to the wound, when black legal practitioners received instructions, they were often restricted to performing inferior peripheral work while whites enjoyed specialised lucrative work.

These discriminatory briefing patterns resulted in blacks being over-represented in providing legal advice in matters involving labour, crime, matrimonial, and road accident claims.

On the other hand, blacks were under-represented in commercial law, where mostly whites offer legal advice in areas such as banking, tax, intellectual property, corporate finance, mergers & acquisitions, asset restructuring, competition law, insolvency and business rescue, aviation and maritime law.

Given the sector’s skewed ownership and briefing patterns, the LSC is designed to remove barriers to entry for black people. It will introduce measures that support emerging players in the sector such as provision of allowances and stipends to black trainees during their training or pupillage and access to regular work for start-up law firms and up-and-coming advocates.

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