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Can fast growing Keystone Law maintain its pace?

10/05/2019

AIM Inheritance Tax UK

Stone archway logo of Keystone Law

Challenger law firm Keystone Law is growing fast thanks to an innovative business model which is attracting a growing number of lawyers. But it comes at a lofty valuation. Our in-depth commentary assesses whether the price of this relative newcomer to AIM is justified.


Keystone Law Group (LON:KEYS) is a highly profitable and cash generative challenger law firm, which was established in 2002 by current chief executive James Knight, who is also a solicitor, and Charles Stringer, who was then head of sales at the BBC. The founders identified an opportunity to provide an alternative to the traditional model for the provision of legal services and Keystone became one of the first platform models operating within the UK legal services mid-market.

In 2013, Keystone took advantage of changes introduced by the Legal Services Act 2007 to convert to an Alternative Business Structure, which permits the ownership and management of legal firms by non-lawyers. This was followed in October 2014, by a private equity fundraising round with Root Capital taking a 35% stake. In November 2017 Keystone raised £9.3m of new money at a share price of 160p on admission to AIM, with selling shareholders receiving £5m. The market capitalisation at IPO was £50m which has swiftly risen to just…

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