BEE is quietly changing in South Africa – and businesses are worried

 ·15 Mar 2021

Business group Sakeliga has raised red flags around a draft code for the legal sector, which it says poses a threat to the independence and functioning of the legal profession.

The code harms not only the private interests of practitioners, firms, and clients, it said, but also the public interest, given the legal professions’ foundational role in a constitutional order.

Now in its second iteration for public comment, the draft legal sector code seeks to bring the legal profession under sector-specific B-BBEE codes.

“Regulation of the legal industry should serve the function of ensuring and overseeing the quality of service and the independence of the legal sector,” said Piet le Roux, Sakeliga chief executive.

“Instead, the draft legal sector code introduces partisan political considerations – specifically racial transformation – as matters of law into the industry.”

Properly understood and legitimately pursued, these considerations should rather be matters of public advocacy and lobbying within the industry instead of regulation, the group said.

“The code, therefore, detracts from the proper functioning of the legal profession and its institutions, and is not acceptable,” said le Roux.

The codes are also notable for its proposal of onerous pro bono requirement, he said.

The code requires legal firms to offer advocacy work on a yearly basis, which some practitioners have complained will eat into their already busy hours.

“If implemented, it would not serve to make legal services more accessible, but rather more expensive and inaccessible, and disproportionately harm smaller firms, le Roux.

BEE is changing

Le Roux said the legal sector code is also instructive regarding new trends in BEE regulations.

In earlier phases, BEE was generally focused on the procurement relationship between the state and providers of products of services to it, he said.

“Lately, in codes such as the legal sector code, BEE regulation jettisons the requirement of the state as a transacting party.

“The new approach is to regulate for BEE requirements regardless of state involvement, which poses serious implications for freedom to trade and freedom to procure professional services,” Le Roux said.

Le Roux pointed to the proposed Property Practitioners Act and Conduct of Financial Institutions Act as legislative developments with a similar application of BEE.

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