Keystone Law has made last year’s 11% uptick in turnover look ordinary by comparison, today (28 April) announcing an eye-catching 27% boost in revenues from £55m to £69.6m.
This rate was bettered by the profitability increase: adjusted profit before tax stood at £9.1m, representing a pacey 52% jump from last year’s £6m figure. Overall, Keystone is in a healthy financial position, boasting zero debt and a strong operating cash conversion of 103%, with cash generated from £10m in operations.
Despite Keystone’s market reputation as a flexible firm with remote working a fundamental aspect, chief executive James Knight (pictured) told Legal Business that roughly £400,000 was saved on overheads during the pandemic: ‘We run a lot of events and put a strong emphasis on real-world interactions with clients. Obviously for a large part of last year these had to move online, with the £400,000 saving going straight to our bottom line.’
As with 2021’s results, the firm can point to an impressive track record in recruitment as a major factor in the swelling finances. Throughout 2022, Keystone recruited 41 ‘principals’, with that partner equivalent headcount growing from 353 to 394. This was in fact a notable drop-off from 2021, when 51 principals were recruited. Keystone noted that such was the surging client demand in all firms last year, the recruitment market was impacted as lawyers were ‘too busy fee-earning to seek change.’
This did not stop Keystone from attracting partners en masse to its flexible working model – as recently as this week, the firm announced a batch of ten partner-level hires across a range of practice areas, and in January Keystone picked up 12 partner-level lawyers in a similar fashion.
Such was its financial success, Keystone is proposing a final ordinary dividend for the year of 11.2p per share (compared to 7.1p in 2021), bringing the total ordinary dividend for 2022 to 15.7p. This is a significant increase on last year’s total ordinary dividend of 10.7p per share.
Further, ‘recognising the strength of the balance sheet’, Keystone intends to hand out an additional special dividend of 10p per share if approved at the firm’s AGM, slated for 5 July.
Knight concluded: ‘We are very happy with the results, but fundamentally it’s not about our share price, it’s about doing a good job. If you can provide clients with a good service, then everything else will follow.’