Who Must Submit an Annual Legal Sector Compliance Report?
In terms of Paragraph 13.8, read together with Paragraph 13.10 of the LSC, all Legal Sector Measured Entities (LSMEs) are required to submit an Annual Compliance Report to the Legal Sector Charter Council. The Council will use the report to measure transformation progress and assess compliance with the targets set out in the Codes.
When Must the Report Be Submitted?
The LSC provide that the first Annual Compliance Report must be filed on the first anniversary of the commencement of an entity’s measurement period. In practical terms, a law firm whose measurement period began on 1 March 2025 would ordinarily be expected to submit its first report on 1 March 2026.
However, Paragraph 13.8 of the LSC further requires that the report must include a B-BBEE scorecard that has been audited by an accredited verification agency. In practice, firms will submit their annual reports once the verification process is complete or no later than 6 months after their financial year end. Firms should start preparing for verification well before year-end.
What Must Be Included in the Annual Legal Sector Compliance Report?
The Annual Compliance Report must contain the information prescribed by the Legal Sector Charter Council and must be completed using the templates provided by the Council. The report must include:
- A completed Annual Compliance Report in the prescribed format
- A B-BBEE scorecard that is verified by an accredited verification agency
Incomplete submissions may result in delays, additional queries, or unnecessary compliance challenges.
Are Any Legal Entities Exempt?
Not all legal entities are required to submit a full Annual Compliance Report. In terms of Paragraph 13.8 of the LSC, legal entities that falls within the below lists are exempt from submitting the Annual Compliance Report:
- Exempt Legal Entities (ELEs); or
- Black-Owned Qualifying Small Enterprises (QSEs)
These entities only need to submit the following information:
- A sworn affidavit; or
- A certificate issued by the Companies and Intellectual Property Commission (CIPC).
There is, however, an exception. Where an Exempt Legal Entity elects to pursue enhanced recognition in terms of LSC 000, additional verification and reporting requirements may apply. Firms considering this route should carefully assess the implications before making that decision.
Preparing for Compliance
Annual compliance reporting is a formal obligation imposed on Legal Sector Measured Entities under the LSC. Firms that maintain the necessary records throughout their measurement period and complete their verification process timeously will be better positioned to meet the Council’s reporting requirements. As reporting obligations become an established feature of the LSC, firms should ensure that annual reporting forms part of their broader compliance and transformation planning.
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