Britsih law firms have been criticised by a legal heavyweight for using wage subsidy schemes to “maximise profits”.

James Knight, (pictured), the boss of listed firm Keystone Law, headquartered in London, said furlough schemes are not designed to protect profits and that it is indefensible to take State money in this fashion.

Share price

Keystone Law announced a more than 16% rise in revenues, Stg£4 million in cash, and zero debts, as its chief executive spoke out.

Its share price this week was around 429p. 

As the virus took hold, the UK Government last month rolled out a furlough scheme, to cover up to 80% of salaries. This ratio was later increased to 100% for some SMEs.

Keystone did not use the scheme “notwithstanding the fact that the firm was eligible for relevant employees”, it said, because it is “in a good position to weather the storm”.

The firm’s revenues rose by 16.3% to £49.6 million in the year to January 2020.

Profits before tax

Its profits before tax grew by £700,000 to £5.8 million.

“It’s a terrifying time for many companies,” Knight said.

“We are in an incredibly fortunate position as a result of the money we have in account and being debt free. Our business model is suited to this environment, due to our dispersed working structure.

“The furlough loan scheme is an excellent idea for companies that are cash-strapped that need to stay in operation.

"But to take it to protect your own profits, we thought it was inappropriate.

Ethics

“Many law firms are doing it, and it is not defensible to take that government money. The ethics of a business becomes an important factor.

"Rather than just take what’s on offer, it’s an opportunity to do as they believe; to act in a way that accords with their own ethical beliefs, rather than maximise and protect profits.”