phatshoanehenney workablesolutions

It is with great pleasure that I can report on an

extraordinary year for the phatshoane henney

group of associated firms. It has been a year

that has seen the group double in size and

grow from 11 firms to 24 firms. It is a year that

has seen the launch of many group initiatives

such as the Phatshoane Henney Foundation,

the Phatshoane Henney Honour Medal, the

Training Portal, Phatshoane Henney BEE

Consultancies, and more; and it has been

a year that has seen the group establish itself

as undeniably the largest national association

of law firms in South Africa and a first for the

legal profession.

Apart from group expansion and group

initiatives, our group brand has increased

Overviewsubstantially in strength through the group’s

greater national presence, increased

marketing and strategic partnerships with

major financial institutions and other partners,

and its broader client and service base.

Member firms have also benefited from the

comprehensive Black Economic Empowerment

initiatives commenced in 2006/2007 with

firms undergoing formal BEE verification and

achieving exemplary certification results across

the board.

Whereas many law firms in 2008 have felt the

pinch of economic recession and the slump of

the property market, the group has managed

to leverage opportunities for member firms

through economies of scale inherent to the

group’s size and network, creating growth

opportunities, a stronger business referral

network and negotiating power unavailable

to the average law firm.

Also, the pressure on law firms to meet

technology and regulatory requirements,

the high cost of skilled human capital and

the high demand on specialist support and

infrastructure, has seen many of the larger

South African firms undergo mergers in the

last few years giving rise to various mega

law firms. For the medium to large law firm,

group association has presented a viable

alternative to merging offering corresponding

benefits of size, brand power and shared

infrastructure and support services to remain

competitive and deliver a high quality service

to clients in an increasingly sophisticated

and regulated environment requiring almost

prohibitively costly infrastructure from the

average law firm.

Admittedly, the group established in 2006,

is still in its infancy. Yet the exponential

growth, the systems and structures that have

been developed and the commitment and

enthusiasm with which member firms have

taken up membership and have become

involved in the development of the group,

underpin my certainty as to the vital strategic

role and value-add the group offers, not

only to member firms, but ultimately to

the South African legal profession and the

clients it serves.

It is thus with confidence that I express my

sincere belief that 2009 will see the group

achieve even greater stature, and will see

the group shift from its strong developmental

phase to one of business development, skills

improvement, growth of the group service

directory and an enhanced focus on strategic

and beneficial partnerships.

VioletPhatshoaneChair,PhatshoaneHenneyGroup

AssociatedFirmLocations

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In keeping with a strategy of growth,

2007/2008 saw the group expand its national

footprint to include member firms in major

centres such as Durban, East London, George,

Johannesburg, Pietermaritzburg, Polokwane

and Port Elizabeth. This places an associated

firm in nearly every major urban centre in South

Africa, and with 40 offices, 200 professionals

and 900 employees in the group, represents an

unparalleled occurrence in the legal profession

as well as the professional service industry.

Looking forward, the strategic intent of

the group is shifting. Growth and national

coverage remains important, but as a goal,

the emphasis is towards greater integration

and unification of member firms under the

group brand. As firms remain independent

despite their association, the intent is not to

overcome legal independence, but establish

operational inter-dependence and integration.

By sharing experience, improved knowledge

management, greater accessibility of skills

and improved communication, the group

can achieve a consistently higher standard

and quality of service, allowing differentiation

from other law firms, increased levels of

sophistication and specialisation and adding

value and overall benefit to clients.

The platform that we have created and our

rapidly expanding geographic profile will

continue to provide an important network

for firms to develop business opportunities,

harness group economies of scale and

leverage interest from partners that can benefit

StrategicDirectionfrom the national network and diverse client

base intrinsic to the group.

With 35 member firms projected by end

2009, the phatshoane henney brand will be

a ‘household’ name in the legal fraternity and

of substantial value to the firms associated

therewith. To enhance such value and further

mainstream our brand, requires a two tiered

approach: grow our recruiting power by

establishing group firms as employers of

choice; and build the brand by increasing

the market visibility thereof with corporate and

institutional clients.

To achieve the former, the group will expand

its involvement with university law faculties and

law students and step-up awareness of the

group and the benefits of employment within

the group. The Phatshoane Henney Honour

Medals to be awarded from 2009 to the

best LL.B students in law faculties will lay the

foundation for such increased awareness, and

together with the running of annual university

recruitment campaigns, allow the brand to

become a strong drawing card for applicants.

To enhance the corporate visibility of the

group requires more emphasis on marketing

campaigns and increasing the national visibility

of the group. A key component is greater

standardization of member firm professional

documentation to be more aligned and

consistent enhancing the impact on clients

of many firms across many locations. Also,

media visibility and prominence of the group

with government and institutional clients

through participation of the group in issues

of legal and socio-economic relevance, is a

strategic focal point for the coming year and

necessary to increase the national relevance

of the group.

Closely related, is the expansion of the firm

BEE consultancies and the Phatshoane

Henney Foundation as a means of attracting

a potential new client base for firms and

presenting the group centrally as a role player

in the BEE industry with pro-active intent to

feature as a contributor and initiator of socio-

economic development initiatives.

�5memberfirmsprojectedbyend2009acrossSouthAfrica

Expanding the group brand is a strategic objective for the coming year, with the group, having

achieved a critical mass of numbers now requiring more attention on increasing the visibility

of the group brand and establishing such as one of excellence and reliability. Standardisation

of the use of the group brand and the better integration thereof with firm corporate

documentation will provide a broad national basis for the building out of the group brand

with a variety of group initiatives for 2009 further contributing to the overall visibility of the brand.

ExpandingtheBrand

With 24 firms, 40 law offices and over 200 professionals

in the group, the group is undeniably a new phenomenon

in the legal profession, and offers a solution for legal firms

to access the benefits and support structures of a large firm

and obtain negotiating power and market presence without

sacrificing its independence or requiring the undertaking of a

merger or business acquisition.

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phatshoanehenney workablesolutions phatshoanehenney workablesolutions

Group strategic partnerships entered into

during 2008 demonstrate a strong inclination

towards the property and conveyancing sector

through strategic partnerships with Standard

Bank in respect of their Third Party Fund

Administration system; Nedbank in respect

of their Corporate Saver system; Investec and

their Corporate Cash Manager system; and

Avid Active (Pty) Ltd and the Avid FireFly Mobile

Legal Billing Calculator system providing

property and legal billing calculations and ITC

checks via handheld communication devices.

In each case group firms obtained use of

the partner’s system together with beneficial

interest rate and/or fee structures.

Further developing partnerships include

COFESA, a national employer organisation

supporting the group BEE consultancies

through human resource and employment

equity services; BEE Rating Solutions (Pty)

Ltd undertaking the BEE verification of

group firms and Citadel Trust, undertaking

the corporate trusteeship of the Phatshoane

Henney Foundation.

StrategicPartnershipsIn line with the organic shift of the group

towards harnessing economies of scale

inherent to the group’s size and geographic

diversity, we are encouraged that 2009 will

see group strategic partnerships being forged

beyond the traditional associated with law

firms to also embrace a broader range of

corporate and institutional clients identifying

with and perceiving value prevalent to a

national network of professional firms and

the exposure and potential client base

accessible via these firms. In turn this will

offer member firms with new potential

business opportunities and client bases, our

BEE consultancy initiative being an example

in point of the current diversifying of business

areas in which member firms are involved,

which in turn will assist in mitigating business

risk by differentiating firms from traditional

service areas offered by other law firms in a

very competitive legal environment.

Ournationalfootprintoffirmofficesandbroadclientbase

presenttheidealopportunityforpartneringwithinstitutionalclients

seekingtounlockthevalueinherenttoournetwork.

To remaincompetitiveandcreategrowth inahighlycompetitiveenvironment, themodern law firm ischallenged to

identify service and business areas beyond that of the traditional. Traditional legal services are and will remain the

cornerstoneoftheprofessionbutlawfirmshaveabusinessimperativetoseekalternativebusinessmodelstoimprovetheir

currentserviceareas.Foranindividualfirmtoleveragebeneficialratesorfeestructures,attractcorporateclientsintent

onstrategicpartnershipsorcreatenewclientbasesishighlychallenging,evenformegalawfirms.Throughmembership

ofthephatshoanehenneygroup,memberfirmsareprovidedwiththenecessaryedgetodifferentiatethemfromother

law firms and the negotiating power and network to interest and attract strategic partners. The group also provides

opportunities formember firms toexpand their servicebaseandcreatenewopportunities forbusinessandattracting

potentialclients.

BeyondtheTraditional

With our new group member offices in centres such as

Durban, East London, George, Johannesburg,

Pietermaritzburg, Polokwane and Port Elizabeth and

further centres consistently being added, the group has

a truly national presence offering strategic partners the

benefit of a broad base of professionals connected by a centralised management and communication structure that

can identify and implement strategic initiatives countrywide.

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phatshoanehenney workablesolutions phatshoanehenney workablesolutions

Whilst growth, strategic positioning and

profitability are central motivators underlying

any decision of membership, the support

services and continuing identification of

new initiatives available to group members

contribute strongly to the value experience of

firms. We believe it is these support initiatives

available and achievable through the size of

the group that separate us from our competitors

and raise the profile of firms and their ability

to develop human capital and deliver high-

quality services to clients.

A particular focus of the past year has been

the development of a comprehensive skills

development and training strategy for the group.

All member firms are supported in respect of

skills development through the registration of

a group Skills Development Facilitator which

annually develops and implements Workplace

Skills Plans and Annual Training Reports on

behalf of firms and manages the reclaiming

of grants from SASSETA, to in turn be utilized

by the group for the development of group

training courses and programmes identified as

group training priorities for professionals and

employees.

Additionally, the group has committed

itself to supporting the implementation

of learnership programmes in respect of

candidate attorneys. The group is proud to

announce that it registered the first and only

4 learnerships and 5 discretionary grants with

SASSETA in respect of candidate attorneys

for 2008, this despite continuing problems

with the accreditation of various law schools

responsible for the formal training component

of learnerships. The number is expected

to increase in 2009 to between 15 and 20

candidate attorney learnerships and provide

candidates seeking employment with group

firms with a high level of assurance as to the

training and practical exposure in various

legal disciplines they will receive in addition

to the group focus on establishing mentorship

and performance evaluation programmes

for candidate attorneys. The group is also

actively investigating the availability of future

learnerships for secretarial support staff

to broaden the offering to this important

grouping and enhance the value and training

of such staff.

To make the delivery of training courses to

firms dispersed geographically possible and

commercially viable the group embarked

on a two year development project with its

information technology partner, Nostix (Pty)

Ltd, culminating in the launch of the Training

Portal (www.trainingportal.co.za) in 2008.

The Training Portal is an online training and

education portal providing courses, conference

management and programmes utilising a

sophisticated education management tool.

The Training Portal was developed as a

standalone system with a fully integrated e-

commerce facility to provide tools for training

providers to easily develop and present courses

online using the platform of the Training Portal.

Making the system commercially sustainable

and allowing the generation of additional

income streams from training provider courses

and training delivered to the public was

necessary for the creation and maintenance of

a state of the art web-based training platform

available for use by the group. The Training

Portal has since initiation this year commenced

delivery of its first online courses to group firms

with great success in an important step that

promises to become one of the pillars of our

group support structures.

Initiatives

MorethanR�00000skillsgrantsreclaimedonbehalfof

memberfirmsfromSASSETA

Theimportanceofgrowingourhumancapitalandinvestinginthedevelopmentofouryoungprofessionalshasbeenembracedbyall

firms.Accordingly,substantialefforthasbeenexpendedonunderstandingthenewlyimplementedSASSETALearnershipsforCandidate

Attorneysandguidingfirmsthroughtheprocessofregisteringlearnershipsfortheircandidates.Problemswiththeaccreditationofmany

oftheLSSALawSchoolscoupledwithdevelopmentalchangesintheLearnershipstructurebySASSETA,hasnotdeterredthegroupfrom

registeringthefirstandonly�learnershipsin2008withSASSETA,andpavingthewayformoretofollowin2009.Underthelearnership,

afirmundertakesandcommitstoastructuredImplementationPlanforthetrainingandpracticalexposureofacandidatethroughout

thelearnershipperiod,suchtocomplementthecontractofarticlesenteredintobetweenthecandidateandfirm.

CandidateAttorneysandLearnerships

Implementing processes to assist firms in identifying strategic

skills priorities and implement Workplace Skills Plans and

reclaim skills grants is part and parcel of the group investment in

skills development. Reclaimed grants are pooled and used to

develop and provide courses and training to member firm

employees utilising the online distance education portal (www.

trainingportal.co.za) to deliver training content to members.

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phatshoanehenney workablesolutions phatshoanehenney workablesolutions

Black Economic Empowerment has been an

integral part of the group’s strategic intent

since its inception, with firms, as a condition

of their group membership, undertaking a

commitment towards BEE and transformation.

Building on this commitment and recognising

the role of BEE as a business imperative, the

group has undertaken the establishment of

a national network of BEE consultancies at

various firms. The consultancies expand the

current service areas of firms and provide

consultation advice and support to businesses

to understand BEE, advise businesses as to

the development of their BEE scorecards, and

assist businesses with the complex process

of formal BEE verification by independent

verification agents. Firms have allocated legal

professionals to undergo advanced training

in BEE consulting practices and verification

requirements and are supported by the group

BEE resource centre. The centre provides

standardised consultation documentation,

manuals, procedure notes and templates

to firms in support of their consultancies. A

further online BEE Document Centre and

a telephonic call operator Support Centre

provide support to firms as well as client

liaison, marketing, surveys and more. In a

time of economic difficulty for many law firms,

we believe our BEE consultancies can unlock

a new business growth area for group firms

and assist the group to expand its role as a

national BEE contributor.

In keeping with our BEE intent and recognising

that there is more to business than making

a profit, the group has this year established

the Phatshoane Henney Foundation, a

non-profit foundation with socio-economic

development and charitable objectives. The

Foundation, under the trusteeship of Citadel

Trust as independent corporate trust and

fiduciary manager, provides an accessible

and transparent vehicle for member firms

and other businesses to donate funds for

socio-economic goals and programmes.

The Foundation has a number of programme

streams such as community development,

training and increasing access to justice,

and identifies deserving charities and socio-

economic projects for purposes of receiving

donations and contributions. As Foundation

funds increase, increasing investment will be

made in ensuring monitoring mechanisms

are implemented in respect of institutions

receiving donations to validate that donations

reach their intended beneficiaries. Donors

receive a certificate from the Foundation

evidencing their donations for tax purposes

and validation of socio-economic spending

for purposes of their BEE scorecards. Between

member firm contributions and referrals from

the group BEE consultancies of businesses

interested in donating to the Foundation it

is our expectation that the Foundation will

be a major asset to the group evidencing

its commitment towards socio-economic

objectives and increasing the market presence

of the group through its profile.

Effective recruitment and the growth of our

professional human capital and in particular

Black professionals within the group, remains

an imperative for the group’s future growth.

To further increase the recruiting power and

visibility of the group to law students nationally,

the group has established the Phatshoane

Henney Honour Medal programme at the

following university law faculties across

South Africa: University of the Free State,

Stellenbosch University, Nelson Mandela

Metropolitan University, University of the North

West (Potchefstroom), University of KwaZulu

Natal, Rhodes University, and the University

of Johannesburg. The Phatshoane Henney

Honour Medal will from 2009 be awarded

to LL.B students who have achieved their LL.B

degrees Cum Laude and will be awarded to

these students at faculty award ceremonies.

Students receiving honour medals will form part

of a national group network of candidates that

have received the award and will at selective

universities be further honoured through an

honour scroll at law faculties identifying the

receiving candidates.

ThelaunchofourGroupBEEconsultanciesunderlinesour

commitmenttoBlackEconomicEmpowerment

ThePhatshoaneHenneyHonourMedalprogrammewasemphaticallyembracedbymostuniversitylawfacultiesnotonlyasanopportunity

torewardthetopcandidateswithrecognitionoftheirachievements,butalsoasanopportunityfor lawfacultiestoengagewithand

createfurtherlinksbetweenthelegalprofessionandtheacademe.Theprogrammewillalsoaffordrecipientstheprivilegeofobtaining

anationalawardofferedtotoplawstudentsandformingpartofwhatwillbeanexclusivenetworkofhonourmedalrecipients.

PhatshoaneHenneyHonourMedalProgramme

Recognising the need of South African businesses to obtain

professional support and advice on how to comply with the Department of Trade and Industry BEE Codes of Good

Practice and implement Black Economic Empowerment effectively, the group has

launched the establishment of BEE Consultancies at various

group member firms. Firm professionals are trained to

assist clients to evaluate their BEE position and support them

through the process of obtaining required documentation and

undergoing formal verification of their business to obtain a BEE

scorecard from an accredited verification agency.

Prof.Henning,Dean:UFSFacultyofLawandSamMoleko,Director:PhatshoaneHenneyinc.

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Black Economic Empowerment is not

perceived as a bolt on option, but as an

integral part of our group’s strategic vision

and business imperative. A commonly shared

vision of sustainable BEE and the recognition

that BEE does not stop at Black ownership but

requires integration across all elements of the

BEE scorecard, underpins the BEE initiatives

implemented by the group.

Group initiatives in respect of ownership,

employment equity, skills development,

preferential procurement, recruitment, socio-

economic development, employment policies

and more, provide the required diversity and

structure necessary for firms to integrate a

comprehensive model of BEE within their

organisations. The success of our initiatives

is demonstrated by the exceptional results

achieved by member firms undergoing

formal verification of their BEE scorecards

during 2008. Formal verification has been

conducted by independent verification agency

BEE Rating Solutions (Pty) Ltd (accredited with

ABVA) conducting independent verification of

all member firms forming part of the group

as at June 2008. The following results have

been achieved to date:

Phatshoane Henney Inc. Level 1

Breytenbach Mavuso Inc. Level 2

Cilliers & Reynders Inc. Level 3

Erasmus De Klerk Inc. Level 3

Greyvensteins Inc. Level 2

Haasbroek-Willemse Inc. Level 3

Kotzé Low Swanepoel Level 3

Lange Carr Wessels Inc. Level 3

Naudes Inc. Level 2

Nostix (Pty) Ltd Level 4

Van Der Merwe Du Toit Inc. Level 2

Van De Wall & Partners Level 2

Van Der Spuy & Partners Level 2

Firms taking up group membership after

June 2008 are assisted to implement group

BEE initiatives and are scheduled to undergo

formal verification by June 2009, with similar

exceptional results expected. Firms that fail

to implement BEE measures or maintain a

high level of BEE verification without good

cause, may potentially compromise their

group membership.

2008 has seen comparitive year-on-year

results for Black appointments within the

group, with 8 new Black directors/partners,

11 new Black professionals, 19 Black

candidate attorneys and 45 new Black

employees being appointed by group firms

part of the group as at October 2008. These

appointments compare well with the overall

decrease in appointments as a factor of the

economic regression experienced within the

profession and the economy as a whole. We

remain positive that the greater focus in 2009

on group business initiatives and strategic

partnerships will positively impact on firms

and translate into a continuing number of

Black appointments within the group.

Verification results showed no member firm achieving less

than Level 4 BEE compliance, with Phatshoane Henney inc.

as founding member of the group, setting the standard by achieving a Level 1 BEE

compliance. In addition, many member firms were further

recognised as Value Adding Suppliers allowing additional

procurement recognition of these firms for preferential

procurement purposes.

BlackEconomicEmpowerment

NomemberfirmachievedlessthanLevel�BEE

compliancerecognition

Thephatshoanehenneygroupunanimouslyresolvedduring200�/200�thatallmemberfirmswouldundergoformal

BEE verification as the culmination of BEE measures undertaken by firms and as a necessary step to validating

thegroupandmember firmcommitments towards sustainableBEE. Accordingly,acoordinatedprocessof BEE

verificationwasundertakenbymember firmswithverification resultsunderwritingtheproactivemeasuresof firms.

ThesepositiveresultsshapethecontinuinginvestmentofthegroupinBlackEconomicEmpowermentasalong-term

strategiccommitment.

CommitmenttoBEE

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phatshoanehenney workablesolutions

Reflecting on the past year, the improved integration of the group’s strategic management through the newly formed central Management Committee has been a positive feature contributing towards the momentum achieved by the group in 2008. This integrated approach to strategic planning is set to further evolve during 2009 and assist in the identification and engagement of new business opportunities and strategic development of the group.

In furthering development, significant invest-ment will continue to be made in our support services. In particular, ongoing investment in knowledge management will see the launch of our online group intranet and database system as well as a revamped Knowledge Centre system supporting member firms during 2009. The group database system will be an exciting tool allowing healthier strategic communication, a more sophisticated group service and contact directory and better sharing of business information within the group in addition to a variety of supportive tools for use by group firms.

The group Knowledge Centre, already an indispensable support service available to member firms, will be enhanced through the appointment of additional research personnel as well as an improved online interface to increase accessibility by firms and awareness of legal and other developments. Further areas of expansion will include an improved range of legal updates and circulars to firms

and clients, client information brochures

and a continuing investment in literature

and information databases to ensure that

the Knowledge Centre remains a centre of

excellence within the group.

As imperative as a greater focus on business

opportunities, strategic partnerships and the

expansion of the group brand in 2009 and

onwards will be the impact of group training

initiatives on developing skills and knowledge

within the group. In the coming year we

expect to reap the benefits of our investment

in the training platform, focusing on the

development of programmes that address

skills priorities and assist in professional and

business development. Our ability to develop

our group human capital and better equip staff

for the challenges of the modern profession

will ultimately benefit the group as much as

our investment in supportive infrastructure and

as such is a sine qua non for the establishment

of quality and excellence. Yet, all work and

no play should not become the hallmark of a

fast growing group, and the coming year will

see more opportunities for social interaction

and the development of relationships and

participation within the group.

Lastly, it is important to stress that our

approach to excellence is not intended to be

limited to client service only but is aimed at

embracing a wider philosophy of excellence

personified by our knowledge systems, training

and professional support, brand value,

commitment to BEE and our ability to bring

innovation to our sector and position our firms

for growth towards 2010 and beyond.

LookingForward

TheKnowledgeCentrehasmanagedover1000research

queriesduring2008.

The development and delivery of training courses via the Training Portal to group staff

andprofessionalsisahighpriorityforthecomingyear,withcoursesrelatingtocomputer

proficiency,worksethics,candidateattorneys,professionaldevelopmentandmorebeing

onthelistoftrainingprioritiesidentified.

StaffDevelopment

As proud as I am of our achievements in the

past year, I am even more excited about what

2009 will bring and can with confidence state

that the comming year will see the group

expand its presence in the leagal profession

and beyond.

The Knowledge Centre, as an information and knowledge

management centre, provides a vital support service to

member firms, by assisting members with research

support, the provision of template documentation,

circulating news and updates on legal developments,

and notifying members of conferences and seminars. The availability and use of

such an information centre is vital to any law firm wishing to maintain a superior quality of advice and support to clients.

VioletPhatshoaneChair,PhatshoaneHenneyGroup

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