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Keystone shrugs off coronavirus uncertainty but internal investments see profits tumble 

Keystone Law is producing a resilient performance as the year unfolds, the firm’s interim results show, with revenues up despite the financial impact of the Covid-19 lockdown, but profits have slumped following internal investment at the UK-listed firm.

Revenue in the first half of the firm’s financial year was up 6.5% to £24.5m from £23m last year. However, adjusted profit before tax was down 18% to £2.2m for the period ‘due to investment in the central office support team as well as additional office space in Chancery Lane.’ 

‘It was a good start to the year until lockdown stopped things,’ Keystone’s CEO James Knight (pictured) told Legal Business. ‘New client demand was down around 30% at one point though it is now almost back to pre-Covid levels.’

The firm’s last full set of financials for the year to 31 January 2020 showed revenue was up 16% to £49.6m, with Keystone continuing a run of pacey financial results in recent years. Increasingly it is thought firms with a strong cash position are best placed to endure the economic uncertainty brought by the Covid-19 lockdown. Should that be the case, Keystone will feel confident after ending its interim period with a net cash figure of £6.9m compared to £3.4m in the same period last year.

Though he firm’s growth over the first half of 2020/21 was driven partly by new client needs in light of the pandemic, Keystone’s financial director, Ashley Miller, told Legal Business. ‘While it has been a bit lumpy, what we have seen is a return of the business streams to where we were pre-Covid.’

Miller and Knight also highlighted the firm’s continued push in lateral hires, with lawyer numbers at the firm increasing to 426 over the interim period with 27 new partner-level hires. Earlier this month Keystone added three laterals to its ranks, with corporate specialist Sandra Bates and environmental law expert Yohanna Weber joining from Fladgate and Fieldfisher respectively while commercial property lawyer Alex Heaton joined from Reed Smith.