The LegalTech Ecosystem in Wales

employees in legal services, Wales compares favourably with other regions of the UK, performing at similar levels. 38 However, the contribution of the legal services sector to the economy remains notably lower than in the rest of the UK.

1.3 Issues affecting current and future growth Overall, the Welsh legal sector appears to remain undersized, at least when compared to England. The insufficient allocation of resources to the justice system has proven to be a long-standing challenge for the Welsh legal sector, as highlighted by the Commission on Justice in Wales in 2019. 39 This included reductions in the Westminster Justice and Home Office budgets 40 – which seem to be continuing at present, due to the effect of high inflation 41 -, legal aid cuts 42 and reductions in funding for the youth justice system 43 and the Crown Prosecution Service 44 . In addition to funding issues, other factors appear to limit the growth of the Welsh legal sector. These include: a) geographic distribution, b) fragmentation and lack of coordination, c) advice deserts, d) slow As evidenced by the data examined above, the geographical distribution of legal services in Wales shows a concentration in south Wales and west Wales and, within these regions, in Cardiff, Swansea and, to a lesser extent, Newport. The availability of legal services in rural parts of Wales, and in particular in Mid Wales, is limited. With the proximity of larger cities with a high concentration of legal services providers just over the border from Wales, such as Bristol, Chester, Manchester and Liverpool, it is likely that Welsh firms lose out to firms in these cities. The reasons for this could include better transport connections, higher competition driving costs down, and a higher concentration of expertise in these cities. b) Fragmentation and lack of coordination The Thomas Commission highlighted, in several areas of its report, the need to encourage greater collaboration within the Welsh legal sector. These areas include: adoption of legal technology. a) Geographical distribution

38 Ifan (n 5), 27. 39 The Commission on Justice in Wales (n 1), chapter 2.

40 The Commission on Justice in Wales (n 1), para 2.99. See also House of Commons Library, The spending of the Ministry of Justice (1 October 2019), available at https://researchbriefings.files.parliament.uk/documents/CDP-2019-0217/CDP-2019- 0217.pdf. 41 The Law Society Gazette, “Autumn statement: Real terms cut for justice spending” (17 November 2022), available at https://www.lawgazette.co.uk/news/autumn-statement-real-terms-cut-for-justice-spending/5114334.article. 42 The Commission on Justice in Wales (n 1), paras. 2.103-2.105. 43 Ibid, paras 2.110-2.111. 44 Ibid, para 2.118.

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