Legal Business Blogs

‘We have an insatiable appetite for recruiting’: Keystone posts double-digit revenue rise as hiring picks up

Keystone Law has released its financial results for 2023-24, posting a 15.1% revenue boost to reach £87.9m.

The results, which cover the financial year to 31 January 2024, come after a sustained period of recruitment for the firm, which is continuing to sign up lawyers attracted to its non-traditional, decentralised model.

On 3 May, the firm welcomed former Allen & Overy structured and asset finance head Mario Jacovides, as well as DLA Piper disputes partner Linos Choo and Simmons & Simmons corporate partner Patrick Graves, alongside a series of other additions from firms including Milbank, Gowling WLG and Squire Patton Boggs.

Based on this year’s results, Keystone has proposed to pay shareholders a final ordinary dividend of 12.5p per share in line with its listed status, up from 11.2p.  Adjusted profit before tax (PBT) also rose to £11.3m from last year’s £9.2m, indicating an adjusted PBT margin of 12.8%. 

Speaking to Legal Business, CEO James Knight (pictured) pointed to recruitment as the driving force behind the growth, while recalling that he had cited this as a challenge last year in the face of market-wide difficulties. 

‘This year has been very much about the recruitment side, which has picked up. The legal market has been incredibly buoyant and frothy and recruitment metrics across the board have picked up, almost back to pre-Covid levels. We have an insatiable appetite for recruiting the right lawyers,’ he said. 

Knight added: ‘My own view is that it came out of the fact Covid and Brexit created so many changes.’ 

In the last financial year alone, the firm welcomed 51 new principals – the firm’s partner-equivalent title – resulting in an 8.5% increase in headcount from 432. Additionally, the total number of fee-earners rose to 549, reflecting an 8.3% increase. 

Revenue per principal also saw double-digit growth of 10%, to £212,000 from last year’s £193,000.  

Knight explained: ‘One driver here is the increasing level of sophistication of the work we are getting involved in as the Keystone brand grows.’ 

He also highlighted that the firm’s recruitment of ‘pod members,’ where senior lawyers can bring junior lawyers into specialised teams, is another catalyst for this growth.

Keystone made waves in 2002 with the introduction of its ‘virtual’ model, which allows its lawyers greater independence and a larger share of billing revenue, due to the reduced overheads carried by traditional law firms. Fast forward to now, there are more than 65 fee-sharing firms across the UK such as gunnercooke, which entered the LB100 in 2022. (See LB’s firm profile – gunnercooke: Cooking up a storm last year) 

On the future of the fee-share model, Knight concluded: ‘Nothing happens in its entirety, and nothing happens overnight. But there is a substantial shift that in the next five years we’re going to see as a big percentage of convention of legal services in the mid-market moving to platform firms. We welcome that very much.’

For more, see Keystone Law: Our Little Book