The boss of Keystone Law has said he is “untroubled” by the ambitions of other law firms – such as newly arrived US practice Rimon Law – that want to compete with the listed business.
James Knight made the comments to Legal Futures as he announced turnover up 11% to £55m in the year to 31 January 2021, with adjusted profit before tax up 3.6% to £6m.
We reported on Monday that Rimon, a dispersed firm similar to Keystone, has entered the UK market with plans to expand rapidly and challenge the likes of Keystone.
Mr Knight said: “It’s very ambitious for another organisation to think they can come in and catch up. We remain untroubled by other organisations that have decided to emulate the business model.”
There was, he said, a “significant advantage” in Keystone being “the first, biggest and strongest brand” among dispersed firms.
“We have 20 years of experience,” he went on. “We are ambitious and are likely to pick up the lion’s share of those lawyers who are appropriate for Keystone because they want to come where the best lawyers are, the strongest brand and best support.
“There’s always room for those that operate in different niches and levels of the market.”
The number of principals, or senior consultants, increased from 328 to 369 over the year and there was a notable increase in the number of principals employed junior lawyers in their own ‘pods’.
There were 44 pods at the end of the year, compared to 31 12 months earlier, that between employed 74 people, up from 56.
“This growth has been driven by a combination of new and existing principals and further endorses the strength and flexibility of the model,” said Mr Knight.
Keystone remained an appealing option for lawyers, it appeared: the number of suitably qualified new applicants increased 6% to 253 and the number of offers accepted by candidates grew 25% to 70.
The firm’s operating model meant it was far less affected by lockdown than traditional firms, and so it did not furlough any employees or defer any tax payments.
It has also reinstated dividends, paying a final dividend of 10.6p per share, of which 3.5p is what would have been paid for the previous financial year had the pandemic not occurred.
Keystone’s share price has, for reasons that are not clear, risen significantly in 2021. During 2020 they dipped 5%, closing at 505p, having recovered significantly from its lockdown low of 365p in March 2020. They closed yesterday at an all-time high of 665p.
Mr Knight added: “I am excited about the year ahead, not least because the vast majority of the legal profession has started to suspect something that we have known for 20 years: if the right tools and infrastructure are in place then lawyers, even when undertaking complicated, multi-disciplinary transactions, can deliver a far better service if they are given flexibility and autonomy while enjoying a better work-life balance.”