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2. The Transformation
Landscape
2017 saw the full impact of the Amended BEE Codes realised.
Although most law firms managed to postpone verification under
the Amended BEE Codes, by 2017, they had no choice but to face
their first verification under the Amended BEE Codes.
For smaller firms, the Amended BEE Codes appears to have provided
Law firms are a substantial advantage by lifting the annual turnover threshold
to qualify as an Exempted Micro Enterprise or “EME” to R10 million.
effectively required This elevated threshold now accommodates more law firms than
the previous R5 million threshold and affords automatic recognition
to achieve level 2 as level 4 BEE contributors. For law firms with turnovers above R10
million, the Amended BEE Codes have posed a far greater challenge
or 3 BEE recognition as increased BEE targets, minimum thresholds for Ownership, Skills
Development and Supplier and Enterprise Development, and
levels despite the compulsory measurement across all the scorecard elements, have
seen most firm BEE levels fall, or, even quite frequently, see firms face
challenge this being BEE non-compliant.
poses for most law One may be forgiven in having predicted that the benchmark for
what constitutes a ‘good’ BEE level would be moderated by the
firms impact of the Amended BEE Codes. Such a prediction did not
however account for the dramatic impact of increased procurement
targets under the various sectoral BEE charters and the Amended
BEE Codes. The pressure on corporates and financial institutions to
address their procurement has negated the probability of lower BEE
levels being acceptable. Such institutions recognise that to meet their
own compliance requirements, they need to be more aggressive in
compelling suppliers and service providers to achieve higher BEE
levels or risk losing work.
Law firms are now required to aim for a level 2 or 3 BEE recognition
despite the challenge this poses. To achieve higher than automatic
level 4 recognition, EME’s will be compelled to verify under the QSE
Scorecard. Given the high cost of compliance and the need for
black ownership and black professionals under the Amended BEE
Codes, these factors will undoubtedly have a large role to play in the
future viability of many law firms.
The result of these combined pressures have necessitated greater BEE
support and planning assistance to Group firms and a heightened
awareness by firms of the importance of accelerated transformation
plans for their firms in a legal and BEE-compliant manner.
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