Broad-Based Black Economic Empowerment Act, 2003 (Act No. 53 of 2003)

CONCEPT

DEFINITIONS

advocate

means a legal practitioner who is admitted and enrolled as such in terms of the LPA;

annual revenue

means the income generated by an LSME in providing its services in the course of rendering professional services as regulated by the LPA;

associate

means an attorney employed in such a capacity by an LSME in terms of an employment agreement concluded by these parties;

attorney

means a legal practitioner who is admitted and enrolled as such in terms of the LPA;

B-BBEE Act

means the Broad-Based Black Economic Empowerment Act No. 53 of 2003, as amended;

B-BBEE

means Broad Based Black Economic Empowerment - the viable economic empowerment of all black people, in particular women, workers, youth, people with disabilities and people living in rural areas, through diverse but integrated socio-economic strategies that include, but are not limited to:

B-BBEE Commission

means the Commission set up in terms of section 13B of the B-BBEE Act;

B-BBEE-compliant LSME

Means a legal sector measured entity that has achieved a Level 1 to Level 8 B-BBEE status level as set out in the B-BBEE Codes;

B-BBEE verification agency

means an entity which has been confirmed, approved and classified as such by the B-BBEE verification regulator or SANAS to verify compliance with the LSC in terms of the provisions of the B-BBEE Act;

B-BBEE verification certificate

means any certificate prepared and issued by a B-BBEE verification agency verifying compliance with the LSC by the LSME in terms of the provisions of the B-BBEE Act;

B-BBEE verification regulator

means a body appointed by the Minister for the accreditation of rating agencies or the authorisation of B-BBEE verification professionals;

black people

is a generic term which means Africans, Coloureds and Indians:

51% black owned

means an LSME in which:

51% black women owned

means an LSME in which:

black owned

means an LSME that is 51% or more than 51% black owned;

black women owned

means an LSME in which;

black youth

means black people between the ages of 14 and 35 years as defined in the National Youth Development Agency Act 54 of 2008

board of directors

means, in respect of an incorporated LSME, a body that is constituted by the directors of such LSME, and in respect of a partnership, a body which is constituted by the partners of such an LSME, which, in each event, is responsible for the executive management decisions and/or strategic direction of such an LSME;

candidate attorney

means a person undergoing practical vocational training with a view to being admitted and enrolled as an attorney in terms of the LPA;

Charter Council

means the Legal Sector Code Charter Council to be established by the Minister of Justice to oversee and implement the LSC, as set out in paragraph 13 of this LSC;

Companies Act

means Companies Act No. 71 of 2008, as amended;

continuous legal education

means the practical legal training which is intended to improve the practical knowledge and skills of the practitioners (including the skills and knowledge of candidate attorneys and pupils);

confirmatory affidavit

means an LSC-specific sworn affidavit to be completed by qualifying advocates for purposes of declaring and confirming their race and annual revenue for measurement purposes as envisaged in this LSC;

designated categories

means black women, black youth, black people with disabilities and black people from the rural areas, as contemplated in this LSC;

director

this term shall bear the same meaning as defined in the Companies Act;

DOJ&CD

means the Department of Justice and Constitutional Development;

DTIC

means the Department of Trade, Industry and Competition;

EAP

means the Economically Active Population, comprising persons between the ages of 15 and 65, as may be determined from time to time by the quarterly labour force survey published periodically by Statistics South Africa. The operative EAP for the purposes of any calculation under the LSC shall be the most recently published EAP statistics;

economic interest

means the right of a legal practitioner to share in the profits and liabilities of an LSME and to receive distributions from that LSME, representing a return on ownership similar in nature to a dividend right;

ELE

means an exempted law firm which generates annual revenue of not more than R5 million or an advocate who generates annual revenue of not more than R3 million and is exempted from measurement as contemplated n this LSC respectively;

employment agreement

means any written agreement concluded between an LSME and an attorney for the employment of the attorney by the LSME for a certain duration as contemplated therein;

ESD

means an enterprise and supplier development programme as set out in this LSC and includes the measurement of preferential procurement;

equity partner/director

means a partner or a director, the latter notwithstanding the definition ascribed to that term in the Companies Act, who has an ownership interest in an LSME and shares in the profits of that LSME and is liable for the expenses and liabilities of such an LSME;

executive management

for the purposes of this LSC, means executive management shall be constituted by members of the various sub-committees established by the board including any executive committee, or in the case of a partnership, an equivalent structure to carry out and implement specific functions and/or duties, as may be delegated to such sub-committees by the board, from time to time. Such members may include without limitation, managing partners, chairpersons and chief executive persons who are attorneys;

goods and services

for the purpose of this LSC, means goods and services which shall without limiting the generality thereof, refer to and include textbooks, technology hardware and software, furniture, accounting services and electrical equipment and services and all other goods and services that are essential for the operation of legal practices;

incorporated LSME

means an LSME constituted, organised, and incorporated by one or more attorneys in accordance with the provisions of the Companies Act, and registered and established as a law firm with the LPC in terms of the provisions of the LPA;

in-service training

means practical training which is intended to improve and enhance the skills and knowledge of the support staff in an LSME;

junior management

for the purposes of this LSC, shall be constituted by associates and/or professional assistants within an LSME with no specific management duties and/or responsibilities, unless the board determines otherwise;

Large LSME

means an LSME which generates a total revenue of more than R25 million per annum in the case of a law firm and more than R15 million in the case of an advocate;

law firm

means an LSME which has been established by one or more attorneys and is duly registered with the LPC, in terms of the provisions of the LPA, for the purposes of engaging in the business and practice of law in South Africa;

legal entity

shall, for purposes of this LSC, have similar meaning as a law firm, and the two terms may be used interchangeably throughout this LSC;

legal practitioner

shall bear the meaning ascribed to that term in the LPA, but for the purposes of the LSC, it shall include only:

leviable amount

shall bear the meaning ascribed to it in the Generic Codes;

LPA

means the Legal Practice Act No. 28 of 2014, as amended;

LPC

means the Legal Practice Council, which is a national statutory body established in terms of section 4 of the LPA. The LPC and its provincial councils regulate the affairs of and exercise jurisdiction over all legal practitioners (attorneys and advocates) and candidate attorneys and pupils;

LSC

means this Legal Sector Code, gazetted in terms of section 9(1) of the B-BBEE Act;

LSME

means a Legal Sector Measured Entity in the form of a law firm in the case of attorneys whether as sole practitioner, in a partnership, an incorporated legal entity or an individual advocate;

LSTF

means the Legal Sector Transformation Fund to be established in terms of paragraph 37 of this LSC, by the Charter Council, for the purpose of receiving and administering contributions made by qualifying LSMEs and advocates and any ELEs seeking enhanced recognition in terms of this LSC, to provide financial assistance and support to black legal practitioners and for transformation-related purposes as may be determined by the Charter Council from time to time;

measurement date

means the last day of the measurement period (or such later date agreed upon with the LSME) that is as close as practically possible to the commencement of the verification or to the date of the LSME’s confirmation affidavit, whichever the case may be;

middle management

means senior associates and/or senior professional assistants employed by any LSME who carry out and/or implement any decisions, functions and/or management duties, as may be delegated to them by directors, partners or practice group heads or department heads from time to time;

Minister

means the Minister of Trade, Industry and Competition of the government of the Republic of South Africa;

Minister of Justice

means the Minister of Justice and Correctional Services of the government of the Republic of South Africa;

NDP

means the National Development Plan which is a set of proposals devised by the government of South Africa aimed at eliminating poverty and reducing inequality by 2030;

NPAT

Net Profit After Tax which is the operating profit of a measured entity after tax. It includes both the loss figures and abnormal figures but excludes extraordinary items as determined by International Financial Reporting Standards;

organs of state

means any of the following institutions:

partner

means an attorney who has been employed in such capacity by an LSME who is entitled to the profits of such LSME and is liable for its expenses and liabilities;

partnership

means an LSME, other than an incorporated LSME established and constituted by two or more attorneys, registered with the LPC in accordance with relevant provisions of the LPA, to manage and oversee the business operations of such LSME and share the profits and liabilities of such LSME;

PGL

means Practice Group Leaders, who are generally equivalent and have the same rank as the heads of departments within the LSME, and carry out the same mandate and/or functions, as heads of departments, as the case may be, within an LSME;

priority scorecard elements

means the compulsory elements that must be complied with in terms of the LSC, as outlined in the scorecards, referring to ownership, skills development and enterprise and supplier development;

professional assistant

this term shall bear a similar meaning as an associate, unless the context indicates otherwise;

PSED

means Procurement, Supplier and Enterprise Development element as a measurement statement as contained in this LSC;

pupil

this term shall bear the same meaning as defined in the LPA;

public entities

means enterprises that are listed as public entities in Schedule 2 or 3 of the Public Finance Management Act No. 1 of 1999, as amended;

QPB

means a Qualifying Procurement Beneficiary who is a recipient that qualifies, in terms of the qualifying enterprise and supplier development contributions and interventions, as set out in this LSC;

QSE

means a Qualifying Small Enterprise LSME which generates annual revenue above R5 million but not more than R25 million or an advocate who generates annual revenue above R3 million but not more than R15 million;

rural areas

for the purposes of this LSC means low population-density geographical areas which are located outside towns and cities, and are recognised as such by Statistics SA, and have limited access to ordinary public services, such as water, sanitation, infrastructure and/or economic opportunities;

salaried director

for the purposes of this LSC means, notwithstanding the definition ascribed to that term in the Companies Act, an attorney employed in that capacity by an LSME who does not participate in the profits of the LSME nor has a legal entitlement to such profits and is not liable for the expenses and liabilities of such LSME;

SANAS

means the South African National Accreditation System, an agency responsible for carrying out accreditations in respect of conformity assessments mandated through the Accreditation for Conformity Assessment, Calibration and Good Laboratory Practice Act No. 19 of 2006, as amended;

senior associate

means an attorney employed by an LSME, in that capacity, who is at a senior level above an associate but who is not a partner or a director at such LSME;

senior management

for the purposes of this LSC, shall be constituted and refer to the heads of departments or PGLs, as the case may be, of the various departments within a relevant LSME, who are the leaders of such departments, and oversee the performance, effectiveness and efficiency of such departments;

senior professional assistant

this term shall bear a similar meaning as a senior associate, unless the context indicates otherwise;

SOEs

means the State-Owned Enterprises which are entities that are wholly or partly owned by the state or any organs of state;

sole practitioner

means an LSME, which, in the case of attorneys, a firm which has been established and is operated by a single attorney as a law firm and registered with the LPC in terms of the provisions of the LPA;

specialised areas of law

means those areas of law from which black people have historically been excluded, and remain largely excluded, or have limited exposure to, including, but not limited to, the following:

Statement 003

means Statement 003: Amended Guidelines for Developing and Gazetting of Sector Codes Issued under s.9 of the B-BBEE Act published in Government Gazette no 38766 of 6 May 2015;

Statistics SA or Statistics South Africa

means the department referred to in section 4 of the Statistics Act No. 6 of 1999, as amended;

Steering Committee

means the committee which was established in terms of the B-BBEE Act as read with Statement 003 to consult with stakeholders with regard to this LSC and to draft the LSC and submit it to the Minister of Justice and Correctional Services and Minister of Trade, Industry and Competition for gazetting and which is constituted by key stakeholders in the legal profession, being the following:

targeted procurement

means procurement from preferred categories of bidders, such as persons previously disadvantaged by unfair discrimination, provided that such procurement (a) does not compromise the value for money requirement; and (b) is an incentive for recognising and rewarding genuine innovators in the case of unsolicited proposals, provided that such incentives do not compromise the competitive bidding process and (c) complies with the provisions of the Preferential Procurement Policy Framework Act 5 of 2000;

total revenue

means the total income of an LSME from its services as determined under South African generally accepted accounting practice; and

voting rights

means, with respect to any matter to be decided by an LSME, the rights of an equity director or partner to vote in connection with that matter.