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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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