Profits at a firm backed by Dragon’s Den investor James Caan almost doubled during the first full year of his involvement.
According to accounts filed this month with Companies House, Knights Solicitors recorded profits before tax for the year ending 31 March 2014 were £3.37m – up from £1.74m in 2012/13.
Turnover also increased significantly, up from £9.4m in 2012/13 to £12.4m last year.
The 2013/14 financial year was the first following the investment from Caan’s private equity house Hamilton Bradshaw in June 2012. Caan and the company are both listed as designated members of the LLP in the accounts.
Managing partner David Beech said the firm had grown turnover by 32% despite what he called a ‘difficult economic environment’.
He added: ‘This growth has been achieved as a result of the acquisition of a new office in Chester, recruitment of additional fee earners and general organic growth.
‘During the year there was a significant effort made to improve our cash flow position by reducing our lock up.’
The acquisition in question was the Chester office of Hill Dickinson, with four partners and 20 staff members, which was bought in July 2013.
The accounts show the acquired business lost almost £60,000 during the year.
As expected, staff numbers overall increased, from 127 in 2013 to 153 in March 2014. Of these, 18 are partners and 73 fee earners. Statements released by the firm since March appear to suggest headcount has increased further.
Staff costs rose from £4.5m in 2013 to £5.6m last year, in part because the entitlement to profit of the highest paid member jumped from £198,000 to £568,000.
Outstanding debts have also risen during the financial year.
The amount owed to creditors within one year went from almost £2m in 2013 to £2.67m in 2014. Of this, bank loans and overdrafts accounted for £745,692.
Amounts due to creditors after more than one year more than doubled, from £316,725 in 2013 to £641,664 last year.
The majority of this was through a bank loan, though more than £100,000 is owed in obligations under finance leases.
Caan has been an outspoken figure on the failings of the legal profession since his company made its undisclosed investment in Knights, which has offices in Cheltenham, Chester and Newcastle-under-Lyme.
Last year he told a conference most law firms were still reluctant to invite external investors into their businesses. Three years ago he told another conference that profit was a ‘dirty word’ in the legal profession.