Revenue at Keystone Law rose by more than a third to £42.7m as the listed legal platform’s principal lawyer headcount rose 14%.
The firm’s financial results for the year to 31 January 2019 – its first full set since becoming the third UK law firm to float in late 2017 – also show a strong 57% increase in net profit before tax to £5.1m.
Keystone’s platform works by recruiting senior lawyers, called principal lawyers, who contract to Keystone, with many recruits attracted to the firm’s flexible working ethos and ability to keep 75% of fees earned.
During the financial year, the firm’s principal lawyer numbers rose to 277 from 244. Accepted offers by principal lawyers similarly rose 7% to 63, with the firm receiving 249 applications over the year. A net 20 fee-earners were also recruited by 15 principal lawyers for their practices, helping push Keystone’s overall fee-earner headcount up 21% to 321.
Founder and chief executive James Knight (pictured) told Legal Business: ‘We’re very pleased to see revenue finish 35% up on this time this year: that was on the back of strong recruitment of new lawyers and also a lot of recruitment by our existing lawyers of their own juniors. Recruitment has been stronger than expected. It’s not just about that but, ultimately, it’s a strong factor.’
Keystone rose £15m from its initial public offering (IPO), but Knight said there were still no concrete plans for the cash, with the firm unlikely to follow other listed law firms in undertaking acquisitions.
He commented: ‘We’re an ambitious firm and one of the primary reasons to IPO in the first place is that it would help us engage with a more sophisticated client; it would be good for brand recognition and enhancement. Anecdotally, that’s been very effective and for larger clients who may have hesitated in engaging with a law firm that was not in the top 20, this may – on the account of the fact it is on the public markets – have overcome any reservations they may have.’
Knight added he was confident of attracting more talent to Keystone, eyeing the mid-tier UK legal market he said was worth about £9bn. ‘At the risk of sounding boring, it’s working well for us,’ he said. ‘We’re growing at a very good rate and we’re enjoying what we do and delivering to the shareholders.’
The firm announced a full-year dividend of 9p a share.