Leading ‘dispersed’ law firm Keystone Law has taken £3.15m investment from boutique private equity firm Root Capital in return for a 35% stake in the business.
The capital will in part be used to acquire founding partner Charles Stringer’s equity interest, with the rest going to “develop and expand the firm’s infrastructure”.
Keystone has been on a major recruitment drive over the past 18 months, growing its headcount by more than 50% to 150-plus lawyers. Its turnover rose from £12.2m in 2013 to £14.1m this year. It became an alternative business structure a year ago and has also expanded to Australia.
Mr Stringer, who occupied the roles of IT and finance director, will become a non-executive director but leaves his full-time role to “enjoy retirement”, the firm said. He will also retain a small equity interest in the firm. His replacement as IT director is Maurice Tunney, who has joined from Field Fisher.
Root Capital’s managing partner, Simon Philips, will hold a seat on the board of Keystone.
James Knight, managing partner of Keystone, said: “We have always experienced strong organic growth and this additional capital injection will help us to realise our more ambitious growth plans.
“Root’s investment really will enable us to rapidly improve the facilities Keystone provides to its lawyers and the service it delivers to its clients. And just as importantly, we are excited to have Root as a partner in a true sense of the word. We know them well and understand how their expertise, connections and growth skills will complement those of Keystone’s existing management.”
Root provides operational private equity to the technology, business services, education and media sectors. It says it invests in entrepreneurial situations where there is potential to grow both revenues and profits.
Mr Philips said: “We were drawn to Keystone because it stands out from the crowd as a forward-thinking law firm with innovative leadership and a clear vision. It is not weighed down by a partnership and it has the infrastructure, people and processes to make huge waves in the legal market. We understand the firm’s unique culture and personality and the driving factors that make it so successful and look forward to nurturing these in the future.”