Major research project, Welsh Legal Sector Transformation Report 2026, examining the challenges, ambitions and priorities of Welsh law firms has released their findings.
Legal News Wales and independent legal software provider Osprey Approach gathered the views of more than 50 law firms across Wales, with 96% of respondents holding senior leadership, management or operational roles.
The report explores issues including business performance and growth, recruitment and succession, technology and artificial intelligence, pricing and business models, and the changing demands facing law firms.
The research project found 47% of Welsh law firms expect to grow over the next 12 months, although two thirds (67%) of those firms are currently flat or declining. It was further found recruitment, retention and talent loss are the biggest threat facing the sector, with 100% of firms saying recruiting qualified solicitors is at least moderately difficult.
Osprey Approach said that technology and AI are seen as the biggest opportunity for Welsh law firms, cited by 27% of respondents, while 46% identify accuracy and reliability as their biggest concern about AI adoption. 66% believe technology investment would be the most strategically beneficial investment area, ahead of training and staff recruitment.
Amy Bruce, marketing director at Osprey Approach, commented: “Digital maturity isn’t just an efficiency question for Welsh law firms anymore, it’s a question about who gets to shape the next decade of this sector, rather than simply adapt to it. Something that struck us most in this research is how many firms are sitting on more capable technology than they give themselves credit for. The gap we kept seeing wasn’t capability, it was clarity.”
The study further shows that 42% of firms have no succession plan in place, with 33% identifying a lack of suitable internal candidates as a barrier and 48% of firms are either unsure or do not believe their current business model will be sustainable over the next 10 years.
Pricing also emerges as a potential strategic lever. While fixed fee remains the dominant model, not a single firm primarily using the billable hour reported improved performance this year. Hybrid pricing firms were the least likely to report declining performance and the most likely to have improved.
Emma Waddingham, founder of Legal News Wales, said: “It’s our mission to use this report to understand better the evolving ambitions and challenges facing the legal sector in Wales, particularly in the context of wider social and economic pressures, and potential political change ahead. By doing so, we can help structure meaningful collaboration, signpost relevant support, and shape future events that genuinely empower the sector.”
