Legal Sector Codes: What You Need to Know

The long-anticipated Legal Sector Code of Good Practice (“LSC”) has finally been gazetted. These Codes mark a significant step toward, transforming the legal profession by providing an industry-specific framework to address sector-specific challenges.

Key Takeaways: Legal Sector Codes in South Africa

• The Legal Sector Code of Good Practice (LSC) was gazetted on 20 September 2024, marking an industry-specific B‑BBEE framework for the legal profession.
• The Code sets ambitious targets for the next five years:
  • 50% Black ownership (with 25% Black women ownership)
  • 50% Black representation in senior roles (including 25% Black women)
  • 3.5% skills development spend for Black candidates
  • 60% procurement from Black-owned firms (private sector) and 80% from LSMEs (public sector)
• It introduces new firm classifications (ELEs, QSEs, and LSMEs) each with tailored compliance rules and transitional measures.
• As of now, there’s no Sector or Charter Council in place to guide implementation; however, this is expected soon.
• Transcend can support legal firms in navigating the Code through compliance strategy, training, and implementation services.

Understanding South Africa’s Legal Sector Code of Good Practice (“LSC”)

At Transcend, we are excited to see this legislation come to fruition. 

However, as with any new legislation, the implementation phase presents challenges, particularly around interpretation and application. Transcend has a proven track record of partnering with Legal Sector Measured Entities (LSMEs) to navigate these complexities, ensuring compliance, strategy development, and successful transformation.

The legal sector has always been more than just a client to us—it is a partner in legislative compliance, interpretation, and the promotion of transformation, across industries.  

Key Challenges of the Legal Sector Codes

Implementation Challenges

• Immediate Applicability: The Codes apply immediately with effect from 20 September, therefore for companies with financial year-ends after September 2024.
• Certificate Validity: Existing BEE certificates and affidavits remain valid until their expiration date, but obtaining new certificates is challenging due to limited accredited verification agents.

Interpretative Challenges

• No Sector Council: The absence of a Sector or Charter Council means there is currently limited guidance on the application of the Codes. We are aware, however, that a Legal Sector Council is currently in the process of being set up.

New Definitions and Scales

• Revised Classifications: EMEs and QSEs are now classified as Exempt Legal Entities (ELEs) and QSEs, with significant changes to their measurement scales.
• Increased Ownership Targets: Annual ownership targets now reach as high as 50%.
• Recognition Levels: The Codes introduce different recognition levels, diverging from the Generic Codes.

How Transcend Can Help

We are here to assist the legal sector in navigating these new requirements. 

Contact us today to:

• Schedule a consultation.
• Book training sessions on the new Legal Sector Codes.
• Gain expert insights into compliance, strategy development, and implementation.

Partner with Transcend for tailored solutions and expert guidance in driving transformation within the legal sector and beyond.