Knight: Results reinforce investment
Listed firm Keystone Law continues to make significant strides, with revenue up 17% in the first half of its financial year and likely to exceed market expectations for the full year.
The fee-share firm’s share price has shot up in the past fortnight from 579p to 670p yesterday, with the results delivering a 7.4% boost (46p) in a day.
Our review of listed legal businesses showed that Keystone Law was a stand-out performer in 2024, as it has been in several previous years, with its share price up 13% to 574p in 2024, although it reached 720p during the year and was still far short of its all-time high of 865p in 2021.
In the six months to 31 July 2025, revenue reached £54m – with revenue per principal up 10% to £116,800 – and adjusted profit before tax (PBT) leapt 20% to £7.3m. This represents an adjusted PBT margin of 13.6%, up half a percentage point on the same period last year.
The PBT rise was in part due to Keystone renegotiating its bank interest rate, meaning net interest income increased by £600,000 compared to a year earlier, to £1.1m.
Keystone received 164 new applicants during the six months – a little more than last year – and it added 30 new principals, while 19 other fee-earners joined principals’ ‘pods’.
In total, Keystone had 472 principals at 31 July, 17 more than six months earlier, and 140 other fee-earners.
Having paid a 15p special dividend earlier this year after announcing its 2024/25 results, Keystone declared an interim dividend of 7.5p per share yesterday, compared to 6.2p last year.
Management said it expected to beat current market expectations for 2026 of £104m in revenue and £13m of adjusted PBT.
Chief executive James Knight said the results reinforced the ongoing investment in both people and the platform.
“As we maintain our reputation and leading position as the premier platform law firm, we remain confident that Keystone will continue to attract the high-quality talent needed to drive the business forward, delivering sustainable, long-term profits.”
The interim results also laid out the artificial intelligence (AI) tools Keystone was adopting: “These include the ability for our lawyers to produce file notes of Teams meetings in seconds and for our lawyers to use generative AI solutions across any documents held within [document management system] NetDocuments.
“We have developed an internal tool using generative AI as well as an element of agentic AI. This enables our lawyers to interrogate our voluminous operating manual using basic English language queries providing them with logical answers as well as links to the relevant sections of the manual; taking only seconds.
“We have also worked with expert external consultants to identify areas where the deployment of bespoke agentic AI agents could deliver efficiency and enhance user experience across the business.
“We are now reviewing the output from this work in order to prioritise development and implementation which we anticipate will commence later this year.”
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