I'm a friend of Stephen's.
It's British English, period: around 1970's.
Do we need that 's at the end of the name? I can see why it is there when you say, for instance, "I was at Stephen's." Here you omit something; you can put something after Stephens's and complete the sentence: "I was at Stephen's home."
But in the first sentence you cannot put anything after Stephen's.
Also, I found these very helpful: http://www.quickanddirtytips.com/education/grammar/double-possessives, http://thegrammarexchange.infopop.cc/eve/forums/a/tpc/f/340600179/m/337101944?r=796100154#796100154
– May 02 '14 at 07:53