Keystone CEO James Knight

Listed firm Keystone Law has grown its top line and profits before tax by 15% apiece, its financial results for the six months ended July 2019 show.

The firm, which listed on London's AIM in 2017, delivered a six-month top line of £23 million – a rise of 15.3% on the same period last year – while profits before tax rose by 15.4% to £2.7 million.

Firm CEO James Knight attributed the growth trajectory to recruiting "the right lawyers", adding that the growth had been driven by lateral hires "bringing with them their own client following", as well as "significant work for themselves and their colleagues".

Since it floated, the firm has seen its share price surge from 190p to 525p on Friday (September 20) – a 270% increase – while its market cap currently sits at £164 million. 

The firm has in the last six months recruited 27 senior lawyers, notably including a 10-lawyer team from now defunct firm Cubism, comprising a raft of five senior lawyers – or 'principals' – and five juniors.

Likening the firm to St James's Place Wealth Management, Knight underscored the importance of the firm's 'platform' model, where lawyers generally operate on their own or within their own autonomous teams, with the firm providing IT, compliance and other administrative services.

Knight described it as a "plug-and-play" model, where "autonomous teams can determine shares and who gets paid what", but have the infrastructure for IT, compliance and other essentials at their disposal.

He also highlighted the work that is cross-referred between platforms, which he said made up about 30% of the firm's overall workload. "So in that respect it's a lot like a conventional firm," he said, adding: "We inject a culture of cross-referral work, keeping work within the firm for the greater good."

In the last six months, the firm has also delivered an interim ordinary dividend of 3.2p per share and a special dividend of 8p per share.

Looking ahead, Knight said he expects the firm to continue to capitalise on an aggressive recruitment strategy, with more team hires a likelihood. "That will happen," he said, stressing that bringing in lawyers who want to leave the "conventional rigours" of traditional firms is a "key part of our growth".

To accommodate its augmented headcount, the firm has also upped some of its liabilities, including its lease which has soared to more than £2 million, compared to £676,000 in the same period last year. Meanwhile, its trade liabilities also jumped by more than £3 million to £12.3 million.

In May, the firm posted a more than 35% increase in its total annual revenues, to reach £42.7 million in its first full-year financial results since it floated.