If law firms want to perform well in the charter scorecards designed for the legal profession, they should not only have black shareholders, but also remunerate their black employees well.
This is according to a report on the profession’s scorecards, compiled by a technical committee appointed by Justice and Constitutional Development Minister Brigitte Mabandla, published for comment on February 25.
The committee consists of Black Lawyers’ Association president Andiswa Ndoni, former co-chairperson of the Law Society of South Africa David Gush and Port Elizabeth lawyer Max Boqwana.
The process of constructing black economic empowerment (BEE) scorecards for the legal profession was kick-started after completion of the legal services sector charter in December last year. There are seven scorecards against which law firms will be measured.
Ownership should be measured not only in terms of shareholding, but also by “economic interest” or remuneration. The compliance element refers to current compliance and targeted compliance over five and 10 years.
Twenty points are allocated to this category and divided equally between share of equity and remuneration. This was done to “cover all aspects of ownership”.
With management the suggestion is that entities be measured according to turnover and the number of partners or directors.
Small enterprises have a yearly turnover of between R1-million and R5-million, medium firms between R5-million and R20-million and large entities above R20-milliona year.
Small firms have less than five partners or directors, medium firms more than five but less than 10 and large enterprises more than 10.
If an entity doesn’t qualify in both categories the designated category will be that in which the greater designation applies. “For example, a firm with less than 10 partners with a turnover of in excess of R20-million will be designated a large firm.”
The measurement of management would include all professional and non-professional staff. Non-professional staff includes the financial manager, procurement manager, IT manager and office manager.
For employment equity, the technical committee proposed that employment equity be determined by two indicators: compliance with the Employment Equity Act and the percentage of historically disadvantaged staff employed as professionals and non-professionals.
Skills development, firms are required to ensure that 1% of total staff hours worked are assigned to internal professional and non-professional staff training.
The report recognises two types of procurement: legal services and all other services, with an emphasis on the procurement of legal services.
The enterprise development scorecard concerns the provision of skills to external entities by the number of hours spent in this regard. It is measured in terms of “hours of training, mentorship and twinning” a year.
Pro bono hours rendered by law firms are measured under the socio-ecomonic scorecard. It is suggested that all professional legal practitioners provide at least 24 hours of pro bono work a year. Candidate attorneys are excluded from this provision.