New Legal Codes

Attention all Legal Firms: New B-BBEE Legal Codes

Attention all legal firms! The Broad-Based Black Economic Empowerment (B-BBEE) Legal Sector Code was Gazetted on 20 September 2024, bringing immediate changes that could impact your firm.

No Transition Period: Immediate Compliance Required

The new B-BBEE Legal Sector Code does not include a transition period, Certificates issued before 20 September 2024 will however still be valid up to expiry date. This means that legal firms and advocates need to act now. Planning for compliance under the new codes is essential to avoid any disruption.

Key Changes: Revenue Thresholds and Compliance Requirements

One major change involves the annual revenue thresholds that determine whether legal firms and advocates can make use of a Sworn Affidavit instead of undergoing full verification. Here’s a breakdown of the new thresholds:

For Attorneys:

• Annual Revenue: R 0 – R 5 million
  Attorneys falling within this revenue range are fully exempt from the Legal Sector Codes. A Sworn Affidavit will suffice, and the following procurement recognition levels apply:some text
  • Level 1: 100% Black Owned Firms
  • Level 2: More than 51% Black Owned Firms
  • Level 4: Less than 51% Black Owned Firms

Firms can enhance these levels by contributing to the Legal Sector Transformation Fund, Skills Development, or Enterprise Development (specific targets will apply).

For Advocates:

• Annual Revenue: R 0 – R 3 million
  Advocates in this category are also exempt from the Legal Sector Codes and can use a Sworn Affidavit, with the following procurement recognition levels:some text
  • Level 1: Black Advocate
  • Level 4: White Advocate
• Annual Revenue: More than R 3 million
  Advocates with revenue exceeding R 3 million will need a SANAS Verification Certificate. They will be measured only on the Skills Development Scorecard, which differs from that of attorneys.

For Legal Firms and Advocates with Revenue Between R 5 million and R 25 million:

• Attorneys: Revenue between R 5 million and R 25 million.
• Advocates: Revenue between R 3 million and R 15 million.

These firms and advocates will be classified as Qualifying Small Enterprises (QSEs) and must comply with the relevant codes accordingly.

Notable Differences Between Legal Sector Codes and Generic Codes

While the new Legal Sector Codes are in line with the overall B-BBEE framework, there are some important distinctions to be aware of:

1. Black Ownership Targets
   There are increased targets for Black Ownership, Black Women Ownership, and Top Management over the next five years.
2. Specific Occupational Definitions
   The new codes introduce specific definitions for occupational levels within legal practices.
3. Skills Development Scorecard
   Attorneys and advocates will be subject to a significantly different Skills Development Scorecard. Key focus areas include:some text
   • Increased training targets for black legal practitioners.
   • Continuous Legal Education Programmes for black legal practitioners.
   • Mentorship and retention programs for black candidates.
   • Enhanced training for black support staff.
4. Preferential Procurement and Enterprise Development Scorecard
   This scorecard includes a focus on:some text
   • Legal services for Black Advocates.
   • Procuring goods and equipment from black suppliers.
   • Partnering and sub-contracting with Black Exempted Legal firms.
   • Contributions to the Legal Sector Transformation Fund.

Stay Informed and Plan for Compliance

These updates represent just a few of the changes included in the Legal Sector Codes. The new standards aim to advance transformation in the legal profession, making it crucial for firms to understand their obligations and take action.

For more details or to schedule a consultation, reach out to Elevate Advisory Partners at info@elevateadvisory.co.za.