To put it kindly, Wales has an image problem.

For proof, look no further than a quick word association game: think sheep, male-voice choirs, mines, and Neil Kinnock, the former Labour Party leader.

It is a hackneyed image to present to the world, and one that 21st-century Cardiff is doing its best to dispel.The city centre is engulfed in an orgy of redevelopment.

Building sites appear at every turn, with the magnificent Millennium Stadium - which staged the Rugby World Cup Final last year - towering above the scaffolding.

Cardiff Bay, a few miles out of the centre, stands as a prime example of 'new Cardiff' - where once was dilapidated docks now stands a wealth of wine bars, a number of streamlined office d evelopments, a five-star Rocco Forte hotel and 'even a Japanese restaurant', taxi drivers report in awe.Although justifiably proud of the new Cardiff slowly emerging from the coal dust, Russel Jenkins, senior partner of leading Cardiff firm Hugh James Ford Simey, admits there is a long way to go.

'We always feel a bit persecuted in Wales,' he says.

'You get the feeling that firms in London who are looking to expand tend to draw the line at Wales, and go for Bristol instead.'Howard Palser, senior partner at leading commercial, employment and insurance firm Palser Grossman, agrees with this assessment.

'Opening our Bristol office [in 1995] was very advantageous for us because we consciously didn't want to be seen only as a Welsh firm,' he explains.Although the Cardiff base is the headquarters for the firm's other offices in Birmingham, Bristol, Southampton and Swansea, he admits that being seen as a purely Welsh firm is an 'issue'.

'Clients who are based in London or Birmingham, who don't know Wales first hand, will often view it as "that place somewhere over there".'This feeling of frustration is a common complaint among the Cardiff law firms, but one that - they hope - will not last long.

Cardiff is, the lawyers say, 'buzzing', thanks to investment attracted by bodies such as the Welsh Development Agency (WDA), Cardiff City Council (CCC), and the recently wound-up Cardiff Bay Development Corporation (CBDC).'There's no doubt that the city's doing very well - you can see that just by walking around the centre,' says Bleddyn Rees, divisional director of business services at M4 corridor firm Morgan Cole.

However, he adds that this is not the end of the story.

'The challenge for south Wales has always been to increase the number of home-grown entrepreneurs, who can develop their businesses from small- and medium-sized to listed companies.'This aim, he hopes, will come a step closer with the implemen-tation of EU Objective 1 funding - which is to redevelop regions that seriously lag behind the EU average - in west Wales and the valleys next year.

The funding is worth £1.2 billion over seven years.

'This will fuel some interesting projects,' he says, 'and will obviously be a major event for the Cardiff office.'Objective 1 funding aside, the major recent business trend in the Cardiff area has been the growth of public-sector work, and the corresponding decline in private industry.

Morgan Cole's clients, according to Mr Rees, reflect the general nature of commercial legal practice in south Wales: it has 'a higher number of public-sector organisations than you would see in, say, Bristol but as a result far fewer indigenous Plcs than many other cities.'Morgan Cole's clients include the WDA, the National Museum of Wales and the Wales Tourist Board.'Public-sector work has definitely increased in the past few years,' says Rod Thurman, senior partner of Edwards Geldard, which cites public bodies such as the WDA and water group Hyder as among its clients.

Although he credits the WDA as doing an 'excellent job' in attracting private business into Wales, he admits that the current economic climate is not particularly favourable for foreign investors.

'The pound is so high at the moment that other countries - such as Hungary, Poland and eastern Europe in general - seem more attractive to big businesses.'Along with the high levels of sterling, Wales has also long suffered from the slow and painful death of its traditional manufacturing industries.

However, this does not seem to have had as major an effect on its law firms as might have been expected.

It is not a case of less work, just different work.

'There's no doubt that traditional industry has been declining for some time,' says Frances Williams, president of Cardiff and District Law Society and partner in niche family practice Larby Williams.

'However, it's been replaced by other businesses such as electronics or e-commerce.

The work is still out there - it's just moved around.'Despite these protestations, the fact remains that Wales is, by its very nature, a small country with a necessarily limited market for law firms.

As a result, the top Cardiff corporate law firms - Eversheds, Morgan Cole, Hugh James Ford Simey, Edwards Geldard and Palser Grossman - are all engaged in programmes of national expansion.Eversheds, of course, is a London-headquartered nationwide chain of offices; Morgan Cole is focused on the M4 corridor following the 1998 merger of Cardiff's Morgan Bruce and Oxford's Cole & Cole to produce the firm; Hugh James Ford Simey, the product of a merger last year between a Cardiff and Exeter firm, now has a strong West Country presence with its Bristol office; Edwards Geldard merged with Nottingham-based Eking Manning just last week; and Palser Grossman has a string of offices around the country.Hugh James' Russel Jenkins sees this as a common trend.

'There's an undoubted advantage in being at least a regional one, if not a national practice,' he says.

'In the past few years, it seems that many south Wales firms have realised that south Wales isn't big enough on its own, and have moved out to various places.'Because of this size problem, the Cardiff market is by general agreement a very competitive one.

'You wouldn't send a child out there,' says Mr Palser.

Any firms looking to make inroads into the Cardiff market should tread carefully, according to Ms Williams.

'You have to remember that Cardiff only has a population of 300,000,' she says, although a further million live in the surrounding areas.

'I think the market has probably reached saturation point, as you can see from the big firms who are all currently expanding out.'Other notable practices in the city include: Leo Abse & Co, which specialises in litigation, notably insurance and claimant personal injury, as well as trade union work; a significant office of south-west England practice Bevan Ashford; while Dolmans and Berry Smith are other well-known corporate/commercial firms.However, the competitiveness of the Cardiff legal arena cannot hold a torch to the turf wars waged daily among the magic circle firms in London.

It is this that Cardiff holds up as its major attraction: London firms may offer trainee solicitors eye-watering salaries, but in common with all those in regional centres, Cardiff's lawyers insist that the city offers much more.'Quality of life,' says Mr Rees.

'It doesn't matter how much money London firms offer, people choose to live in south Wales for personal reasons, and as a result - because the priorities here are different - the retention rates are high.

The beauty of Cardiff is that you have a steady workforce, you're not constantly losing people to competitors.'This is a common theme among the big five firms, none of which sees the London magic circle as posing a real threat to the quality of their recruits.

In fact, more than one see London as their best source for new blood.

'London-based lawyers in their early thirties, who are maybe thinking about starting a family, they will look at their high-pressured lifestyle, and consider whether that's what they really want,' says Mr Palser.'Yes, the London firms pay well, but they expect their pound of flesh - that's not what everyone wants out of life.

And those people will often look towards Cardiff for a job that's still rewarding and challenging, but with a better quality of life.'The work that young Cardiff lawyers will get their hands on is every bit as challenging as their magic circle contemporaries, say the Cardiff firms, and often - they claim - even more so.

'You will have more responsibility earlier in your career here,' says Mr Palser.

'As there are fewer people in our department compared with, say Clifford Chance, our staff have more client interaction, more high-profile work and higher job satisfaction.'This is an important point, for one of the most common problems faced by regional practices is the lack of high-profile, high-powered work, which still tends to be hoovered up by London firms.

Quality of life may all be very well, but if there is no high-calibre and rewarding work, the regional local scene will fail to shine.Eric Evans, a partner at the Cardiff office of Eversheds, Wales' largest practice, claims that attracting work of a high enough standard is not a problem.

'Once the client realises that you can do just as good a job as London firms, you have no problem in keeping them,' he explains.

'A lot of the big players look to the regional practices to carry out their work - if you're capable enough, London rivalry isn't a problem.'One of Eversheds' major clients in Cardiff is the Welsh Assembly.

It won the tender to be its external legal adviser a year ago.

Although the work does not at present constitute a 'particularly large part' of the firm's revenue, with much of the core work being done by the Assembly's in-house team, the scope is very wide.

'We do the bread and butter work - employment, conveyancing, land transactions, general legal work that would arise from any government department,' says Mr Evans, who is a partner in the property department and deals with most of the Assembly work.Perhaps unsurprisingly, he is positive about the effect that the Assembly has had on the legal scene.

'Devolution has had an effect already, and over the years there will be more of a significant change,' he says.

'Issues that arise in Wales are more likely to be decided in Wales rather than London, and over time Wales will develop its own legislation, albeit supporting legislation.'This, however, appears to be the minority view in the Cardiff legal community.

Mr Palser claims that it 'hasn't affected the legal environment at all'- while admitting that it has 'potential' for some ground-breaking work, he diplomatically says 'it hasn't really shown its teeth yet'.

Mr Rees agrees that 'we aren't seeing a huge effect yet', and Ms Williams charitably points out that 'it's only been in existence a year, and these things take time'.Devolution aside, the Cardiff market, in general, seems a pretty healthy one.

The powers that be are pumping money into the area, burying Wales' less than glamorous past under a sheen of 21st-century urban sophistication, and in the process boosting the local legal scene.Whether they will manage to rebrand Cardiff successfully only time will tell, but visitors get the feeling that - whether it's the bi-lingual road signs, or the village atmosphere of the small city centre - Cardiff will always have something to offer.