Limited Liability Partnership registration number SO300381 (Scotland)
Thorntons Law LLP
Annual report and financial statements
For the year ended 31 May 2024
Thorntons Law LLP
Limited liability partnership information
Designated members
CT Graham
SC Milne
GC Buchanan
BN Renfrew
SM Sutherland
LA Larg
CS MacPherson
GG McBean
DN Kinnear
AJ Lang
M Royden
EK Miller
NG McClelland
RG Hamilton
JH McIntyre
DM Etherington
LJ McMonagle
AA Dishington
GG Thomas
DJ Milne
M Coutts
CD Allan
LLP registration number
SO300381
Registered office
Whitehall House
33 Yeaman Shore
Dundee
DD1 4BJ
Auditor
Henderson Loggie LLP
The Vision Building
20 Greenmarket
Dundee
DD1 4QB
Bankers
The Royal Bank of Scotland
3 High Street
Dundee
DD1 9LY
Thorntons Law LLP
Contents
Page
Members' report
1 - 4
Members' responsibilities statement
5
Independent auditor's report
6 - 8
Profit and loss account
9
Statement of comprehensive income
10
Balance sheet
11
Reconciliation of members' interests
12 - 13
Statement of cash flows
14
Notes to the financial statements
15 - 28
Thorntons Law LLP
Members' report
for the year ended 31 May 2024
- 1 -

The members present their annual report and financial statements for the year ended 31 May 2024.

Principal activity

The principal activity of Thorntons Law LLP is the conduct of a solicitors’ practice in Scotland.

Business review

Despite market uncertainty in the first half of the financial year, we experienced strong growth and progression across the business, especially in the final six months of the trading period. Our services for both business and life performed well against our plans, with overall turnover increasing by 16% to £43.93M and our profit up by 35% to £12.4M.

 

Our performance was boosted by client wins across burgeoning sectors including technology, energy and food and drink while we continued to strengthen our presence in more historic sectors such as agriculture, social housing, education and healthcare.

 

New client wins including Eden Dundee, Sanctuary Housing Group and Portman Dental, added to a list of successful client retentions including University of Abertay, City of Glasgow College and Scottish Policy Authority.

 

During the trading period we formally opened the doors of our first permanent office in Glasgow following a long history of working with clients in the city. We also introduced an Inverness office, where we commenced with an experienced team of 12 people from a rival firm. A vibrant, growing city, Inverness is attracting significant interest and inward investment after securing green free port status. We are look forward to building our operations in Inverness and the Highlands and playing a key role in the area’s ongoing success.

 

This year’s growth has created 44 new roles across a range of legal and business service disciplines, allowing us to evolve the diverse skills required to operate a modern law firm. In addition to these new roles, we also hired 17 new Trainee Solicitors taking our total Trainee Solicitor intake to 33.

 

As part of our commitment to recruiting and retaining the professions top talent, we have enhanced our employee value proposition with our Moments that Matter policy, which provides paid leave to support significant family and life events, and market alignment of salaries.

 

Our expertise has continued to be recognised by industry accreditation including ranking in the Legal 500 and Chambers and Partners Guide.

 

We continue to transform the business through digital investment. In the last financial year, we secured an Innovate UK grant to support the adoption of AI and work with service designers to upgrade our systems. Our Director of IT and Transformation was accredited with a merit award for this industry-leading project. We also have plans to introduce Scotland’s first legal tech hub to develop solutions for the legal industry and ensure we are future fit for the growing needs and ambitions of our client base, as well as the wider Scottish community.

 

Our organisation continues to be values and mission driven. We are ambitious but maintain a purpose and responsibility to give back to staff, clients and the communities we serve.

 

Our benchmarking shows that we have a real strength in our ESG operations and alongside our truly market leading family-friendly employee policies we are a pioneering industry leader.

 

Looking ahead, we intend to invest in strengthening our brand and further developing our employee value proposition. We also aim to expand in Glasgow and to seek opportunities to increase our geographical footprint elsewhere across the country.

 

With strong foundations in place, and being a Top 100 UK legal firm, we are confident about the future and proud of our role as an accelerator for Scotland.

Thorntons Law LLP
Members' report (continued)
for the year ended 31 May 2024
- 2 -
Members' drawings, contributions and repayments

The firm’s drawings policy allows each member to draw a proportion of their profit share in twelve monthly instalments with the balance of their profits, net of a tax retention, paid in instalments in the subsequent year. All payments are made subject to the cash requirements of the business. Tax retentions are paid to HM Revenue & Customs on behalf of members with any excess being released to members as appropriate.

 

Each member is required to subscribe to a capital proportion linked to his or her share of profit and the financing requirements of the firm. Capital is repaid to members on retirement.

Designated members

The designated members who held office during the year and up to the date of signature of the financial statements were as follows:

CT Graham
SC Milne
GC Buchanan
BN Renfrew
SM Sutherland
AJ McKeown
(Resigned 31 May 2024)
LA Larg
CS MacPherson
GG McBean
DN Kinnear
AJ Lang
M Royden
EK Miller
NG McClelland
RG Hamilton
JH McIntyre
DM Etherington
LJ McMonagle
AA Dishington
GG Thomas
DJ Milne
M Coutts
(Appointed 1 June 2023)
CD Allan
(Appointed 1 June 2024)
Auditor

Henderson Loggie LLP have expressed their willingness to continue in office and a resolution will be proposed to reappoint them at the next members’ meeting.

Energy and carbon report

This report is provided to summarise the limited liability partnership's environmental reporting in accordance with the UK government's policy on Streamlined Energy and Carbon Reporting (SECR).

2024
2023
Energy consumption
kWh
kWh
Aggregate of energy consumption in the year
1,459,274
1,406,895
Thorntons Law LLP
Members' report (continued)
for the year ended 31 May 2024
- 3 -
2024
2023
Emissions of CO2 equivalent
metric tonnes
metric tonnes
Scope 1 - direct emissions
- Gas combustion
113.35
106.13
- Fuel consumed for owned transport
-
-
113.35
106.13
Scope 2 - indirect emissions
- Electricity purchased
136.87
127.94
Scope 3 - other indirect emissions
- Fuel consumed for transport not owned by the LLP
42.82
50.16
Total gross emissions
293.04
284.23
Intensity ratio
Tonnes CO2e per employee
0.51
0.51
Quantification and reporting methodology

We have calculated the carbon emissions and kWh figures using the UK Government's 2023 and 2024 Conversion Factors for Company Reporting.

Intensity measurement

The chosen intensity measurement ratio is total gross emissions in metric tonnes CO2e per employee (including members).

Measures taken to improve energy efficiency

At Thorntons we are continuing to prioritise our commitment to the environment, and environmental responsibility is an essential foundation of our current five-year strategy.

 

Over the past year, the project team behind our employee engagement group, the Climate Crew, have been working hard to achieve the targets and objectives that had been proposed by the wider group.

 

The targets focus on five key areas being Suppliers & Contractors, Business Travel & Meetings, Energy & Water, Waste & Recycling and Conservation & Biodiversity. Recent changes at the smaller end of the scale include switching off all kitchen hot water boilers overnight, to more substantial changes including an upgrade in our new Inverness office from old style storage heaters to new energy efficient electric heaters.

 

We also completed our Energy Savings Opportunities Scheme Phase 3 report and are now looking at the energy saving options which have been highlighted by the audit. We are working on producing an Action Plan based on the recommendations and this is due to be finalised by March 2025.

 

We continue to monitor energy usage closely and are currently carrying out a review across our estate, based on the data collated for ESOS. We are also now looking at monitoring water usage in addition to energy and aiming to have systems in place for this shortly.

 

We have also contracted with external specialists in sustainability, who are advising us on setting longer-term, measurables targets to help Thorntons to take steps towards achieving Net Zero. The targets are based around the UN Sustainable Development Goals (SDGs) - global goals which countries and businesses around the world are supporting.

Thorntons Law LLP
Members' report (continued)
for the year ended 31 May 2024
- 4 -

With the guidance from our external consultants, we are proposing to set ourselves specific, ambitious targets around reducing our carbon footprint. For example, by 2027 100% of our electricity will be procured from renewable sources, and by 2030 we will aim to reduce water consumption by 50%. Once the targets are finalised, we will discuss further with the Climate Crew and publicise the details to the wider firm.

 

Lastly, we are looking into options to partner with a biodiversity-focused organisation which will allow us to contribute to local rewilding projects. We are expecting to have this in place by the end of this financial year.

List of members

This report has been approved by the members of the LLP. Persons who were members at any time during the financial are listed in the public register held by Companies House.

Statement of disclosure to auditor

Each of the members in office at the date of approval of this annual report confirms that:

 

Approved by the members on 24 February 2025 and signed on behalf by:
24 February 2025
LA Larg
Designated Member
Thorntons Law LLP
Members' responsibilities statement
for the year ended 31 May 2024
- 5 -

The members are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.

 

Company law (as applied by The Limited Liability Partnerships (Accounts and Audit) (Application of Companies Act 2006) Regulations 2008) requires the members to prepare financial statements for each financial year. Under that law the members have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice. Under company law (as applied by The Limited Liability Partnerships (Accounts and Audit) (Application of Companies Act 2006) Regulations 2008) the members must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the limited liability partnership and of the profit or loss of the limited liability partnership for that period. In preparing these financial statements, the members are required to:

 

 

The members are responsible for keeping adequate accounting records that are sufficient to show and explain the limited liability partnership’s transactions and disclose with reasonable accuracy at any time the financial position of the limited liability partnership and enable them to ensure that the financial statements comply with the Companies Act 2006 (as applied by The Limited Liability Partnerships (Accounts and Audit) (Application of Companies Act 2006) Regulations 2008). They are also responsible for safeguarding the assets of the limited liability partnership and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Thorntons Law LLP
Independent auditor's report
to the members of Thorntons Law LLP
- 6 -
Opinion

We have audited the financial statements of Thorntons Law LLP (the 'limited liability partnership') for the year ended 31 May 2024 which comprise the profit and loss account, the statement of comprehensive income, the balance sheet, the reconciliation of members' interests, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the limited liability partnership in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the members' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

 

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the limited liability partnership’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

 

Our responsibilities and the responsibilities of the members with respect to going concern are described in the relevant sections of this report.

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The members are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

 

We have nothing to report in this regard.

Thorntons Law LLP
Independent auditor's report (continued)
to the members of Thorntons Law LLP
- 7 -
Matters on which we are required to report by exception

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 as applied to limited liability partnerships requires us to report to you if, in our opinion:

 

Responsibilities of members

As explained more fully in the members' responsibilities statement, the members are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the members determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the members are responsible for assessing the limited liability partnership's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the members either intend to liquidate the limited liability partnership or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

 

As part of our planning process:

 

The key procedures we undertook to detect irregularities including fraud during the course of the audit included:

Thorntons Law LLP
Independent auditor's report (continued)
to the members of Thorntons Law LLP
- 8 -

Owing to the inherent limitations of an audit, there is unavoidable risk that some material misstatements in the financial statements may not be detected, even though the audit is properly planned and performed in accordance with the ISAs (UK). For instance, the further removed non-compliance is from the events and transactions reflected in the financial statements, the less likely the auditor is to become aware of it or to recognise the non-compliance.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

Use of our report

This report is made solely to the limited liability partnership's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006 as applied by the Limited Liability Partnerships (Accounts and Audit) (Application of Companies Act 2006) Regulations 2008. Our audit work has been undertaken so that we might state to the limited liability partnership's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the limited liability partnership and the limited liability partnership's members as a body, for our audit work, for this report, or for the opinions we have formed.

Gavin Black
Senior Statutory Auditor
For and on behalf of Henderson Loggie LLP
24 February 2025
Chartered Accountants
Statutory Auditor
The Vision Building
20 Greenmarket
Dundee
DD1 4QB
Thorntons Law LLP
Profit and loss account
for the year ended 31 May 2024
- 9 -
2024
2023
Notes
£
£
Turnover
3
43,933,502
37,793,962
Administrative expenses
(32,089,094)
(28,776,559)
Operating profit
4
11,844,408
9,017,403
Interest receivable and similar income
7
928,728
380,256
Interest payable and similar expenses
8
(314,509)
(214,569)
Amounts written off investments
9
(50,515)
-
Profit for the financial year before members' remuneration and profit shares
12,408,112
9,183,090
Members' remuneration charged as an expense
6
(12,408,112)
(9,183,090)
Result for the financial year available for discretionary division among members
-
-

The financial statements have been prepared on the basis that all operations are continuing operations.

Thorntons Law LLP
Statement of comprehensive income
for the year ended 31 May 2024
- 10 -
2024
2023
£
£
Profit for the financial year available for discretionary division among members
-
-
Other comprehensive income
Revaluation of land and buildings
1,300
1,400
Total comprehensive income for the year
1,300
1,400
Thorntons Law LLP
Balance sheet
as at 31 May 2024
- 11 -
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
11
1,539,369
1,449,173
Investments
12
1
50,516
1,539,370
1,499,689
Current assets
Debtors
13
19,983,552
16,583,742
Cash at bank and in hand
208,075
832,585
20,191,627
17,416,327
Creditors: amounts falling due within one year
14
(7,924,314)
(6,430,573)
Net current assets
12,267,313
10,985,754
Total assets less current liabilities
13,806,683
12,485,443
Creditors: amounts falling due after more than one year
15
(990,639)
(1,416,678)
Net assets attributable to members
12,816,044
11,068,765
Represented by:
Loans and other debts due to members within one year
Members' capital classified as a liability
4,701,980
4,814,730
Other amounts
8,114,064
6,254,035
12,816,044
11,068,765
The financial statements were approved by the members and authorised for issue on 24 February 2025 and are signed on their behalf by:
24 February 2025
LA Larg
Designated member
Limited Liability Partnership registration number SO300381 (Scotland)
Thorntons Law LLP
Reconciliation of members' interests
for the year ended 31 May 2024
- 12 -
Current financial year
Loans and other debts due to members
Members' capital
Other amounts
Total
£
£
£
Amounts due to members
6,254,035
Members' interests at 1 June 2023
4,814,730
6,254,035
11,068,765
Members' remuneration charged as an expense, including employment costs and retirement benefit costs
-
12,408,112
12,408,112
Result for the financial year available for discretionary division among members
-
-
-
Members' interests after loss and remuneration for the year
4,814,730
18,662,147
23,476,877
Introduced by members
343,000
-
343,000
Transfer to creditors
(472,050)
(535,441)
(1,007,491)
Drawings
-
(9,997,642)
(9,997,642)
Revaluation of land and buildings
1,300
-
1,300
Transfers
15,000
(15,000)
-
Members' interests at 31 May 2024
4,701,980
8,114,064
12,816,044

Thorntons Law LLP profits are divided based on the profit sharing ratio applying for the year to members. For the year ended 31 May 2024, profit sharing ratios were allocated prospectively and profits were divided automatically among the members. As a result, undrawn profits were reflected in loans and other debts due to members as at 31 May 2024.

 

Members’ capital ranks after unsecured creditors, and loans and other debts due to members rank pari passu with unsecured creditors in the event of a winding up. The amount of capital each member is required to subscribe is determined by the members and under the LLP Agreement of Thorntons Law LLP, a member can only withdraw capital when he or she ceases to be a member.

 

Loans and other debts due to members includes £1,355,712 (2023 - £1,155,149) which is payable after more than one year.

Thorntons Law LLP
Reconciliation of members' interests (continued)
for the year ended 31 May 2024
- 13 -
Prior financial year
Loans and other debts due to members
Members' capital
Other amounts
Total
£
£
£
Amounts due to members
7,257,690
Members' interests at 1 June 2022
4,762,616
7,257,690
12,020,306
Members' remuneration charged as an expense, including employment costs and retirement benefit costs
-
9,183,090
9,183,090
Result for the financial year available for discretionary division among members
-
-
-
Members' interests after loss and remuneration for the year
4,762,616
16,440,780
21,203,396
Introduced by members
658,500
-
658,500
Transfer to creditors
(475,286)
(684,935)
(1,160,221)
Repayment of capital
(132,500)
-
(132,500)
Drawings
-
(9,501,810)
(9,501,810)
Revaluation of land and buildings
1,400
-
1,400
Members' interests at 31 May 2023
4,814,730
6,254,035
11,068,765
Thorntons Law LLP
Statement of cash flows
for the year ended 31 May 2024
- 14 -
2024
2023
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
25
8,502,671
8,257,844
Interest paid
(314,509)
(214,569)
Net cash inflow from operating activities
8,188,162
8,043,275
Investing activities
Purchase of tangible fixed assets
(358,264)
(385,472)
Interest received
928,728
380,256
Net cash generated from/(used in) investing activities
570,464
(5,216)
Financing activities
Capital introduced by members (classified as debt or equity)
343,000
658,500
Repayment of capital or debt to members
-
(132,500)
Payments to members
(9,997,642)
(9,501,810)
Proceeds from new bank loans
2,500,000
3,000,000
Repayment of bank loans
(2,735,883)
(2,499,990)
Net cash used in financing activities
(9,890,525)
(8,475,800)
Net decrease in cash and cash equivalents
(1,131,899)
(437,741)
Cash and cash equivalents at beginning of year
832,585
1,270,326
Cash and cash equivalents at end of year
(299,314)
832,585
Relating to:
Cash at bank and in hand
208,075
832,585
Bank overdrafts included in creditors payable within one year
(507,389)
-
Thorntons Law LLP
Notes to the financial statements
for the year ended 31 May 2024
- 15 -
1
Accounting policies
Limited liability partnership information

Thorntons Law LLP is a limited liability partnership incorporated in Scotland. The registered office is Whitehall House, 33 Yeaman Shore, Dundee, DD1 4BJ.

 

The limited liability partnership's principal activities are disclosed in the Members' Report.

1.1
Accounting convention

These financial statements have been prepared in accordance with the Statement of Recommended Practice "Accounting by Limited Liability Partnerships" issued in December 2021, together with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the limited liability partnership. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention, modified to include the revaluation of properties. The principal accounting policies adopted are set out below.

1.2
Going concern

The financial statements have been prepared on a going concern basis. The Members have considered relevant information, including the annual budget, forecast future cash flows and the impact of subsequent events in making their assessment. In response to the current economic outlook, the Members have performed a robust analysis of forecast future cash flows taking into account the potential impact on the business of possible future scenarios arising from high inflation levels and general economic conditions, and continuation of working capital funding facilities from its bankers in line with previous years. This analysis also considers the effectiveness of available measures to assist in mitigating the impact of these factors.

 

Based on these assessments and having regard to the resources available to the entity, the Members have concluded that there is no material uncertainty and that they can continue to adopt the going concern basis in preparing the annual report and accounts.

1.3
Turnover

Services provided during the year to clients, which at the balance sheet date have not yet been billed, are recognised as turnover. Turnover is recognised by reference to an assessment of the fair value of the services provided at the balance sheet date as a proportion of the total value of the engagement. No revenue is recognised for unbilled amounts on client engagements where the right to receive consideration is contingent on factors outside the partnership’s control. Work in progress on such client engagements is valued at the lower of cost and net realisable value. Amounts recoverable under contracts represent work done at the year-end where a continuing right to receive income exists and is valued at the estimated amount recoverable in excess of fees already rendered on account.

1.4
Members' participating interests

Members’ capital is classified as a financial liability in the balance sheet. Interest payable on members’ capital is included in ‘Members’ remuneration charged as an expense in the profit and loss account.

 

Non-discretionary profit allocations are included in ‘Members’ remuneration charged as an expense in the profit and loss account, whilst discretionary profit allocation are classified as a division of profits within members’ interests.

Thorntons Law LLP
Notes to the financial statements (continued)
for the year ended 31 May 2024
1
Accounting policies (continued)
- 16 -

All amounts due to members that are classified as liabilities are presented within 'Loans and other debts due to members' and, where such an amount relates to current year profits, they are recognised within ‘Members' remuneration charged as an expense’ in arriving at the relevant year’s result. Undivided amounts that are classified as equity are shown within ‘Members' other interests’. Amounts recoverable from members are presented as debtors and shown as amounts due from members within members’ interests.

 

Where there exists an asset and liability component in respect of an individual member’s participation rights, they are presented on a gross basis unless the LLP has both a legally enforceable right to set off the recognised amounts, and it intends either to settle on a net basis or to settle and realise these amounts simultaneously, in which case they are presented net.

The LLPs classifies distributions of profit under financing activities within the cash flow statement.

1.5
Intangible fixed assets - goodwill

Goodwill is the difference between amounts paid on the acquisition of a business and the fair value of the identifiable assets and liabilities. It is amortised to the profit and loss account over its estimated economic life, which is estimated to be 5 years.

 

Negative goodwill is the excess of the fair value of the attributable net identifiable assets at the date of acquisition over the purchase consideration in a business combination.

 

Negative goodwill that can be attributed to monetary assets is recognised as income when the asset are realised.

1.6
Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Property
Freehold over 50 years, leasehold over the shorter of the lease term and the useful economic life
Fixtures and fittings
Over 5-20 years
Computers
Over 3 years

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the profit and loss account.

1.7
Fixed asset investments

Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.

Entities in which the limited liability partnership has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.

Thorntons Law LLP
Notes to the financial statements (continued)
for the year ended 31 May 2024
1
Accounting policies (continued)
- 17 -
1.8
Impairment of fixed assets

At each reporting date non-financial assets not carried at fair value, like goodwill, property and equipment, are reviewed to determine whether there is an indication that an asset may be impaired. If there is an indication of possible impairment, the recoverable amount of any asset or group of related assets, which is the higher of value in use and the fair value less cost to sell, is estimated and compared with its carrying amount. If the recoverable amount is lower, the carrying amount of the asset is reduced to its recoverable amount and an impairment loss is recognised immediately in profit or loss.

If an impairment loss is subsequently reversed, the carrying amount of the asset or group of related assets is increased to the revised estimate of its recoverable amount, but not to exceed the amount that would have been determined had no impairment loss been recognised for the asset or group of related assets in prior periods. A reversal of an impairment loss is recognised immediately in profit or loss.

1.9
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

1.10
Financial instruments

The limited liability partnership has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

 

Financial instruments are recognised in the limited liability partnership's statement of financial position when the limited liability partnership becomes party to the contractual provisions of the instrument.

 

Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Impairment of financial assets

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

 

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

 

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Thorntons Law LLP
Notes to the financial statements (continued)
for the year ended 31 May 2024
1
Accounting policies (continued)
- 18 -
Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the limited liability partnership transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Classification of financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the limited liability partnership after deducting all of its liabilities.

Basic financial liabilities

Basic financial liabilities, including creditors and bank loans are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

 

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

 

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Derecognition of financial liabilities

Financial liabilities are derecognised when the limited liability partnership’s obligations expire or are discharged or cancelled.

1.11
Employee benefits

Short-term employee benefits are recognised as an expense in the period in which they are incurred.

 

Provisions for termination benefits are recognised only when the company is demonstrably committed to terminate the employment of an employee or of a group of employees before their normal retirement date or to provide termination benefits as a result of an offer made in order to encourage voluntary redundancy.

1.12
Retirement benefits and post retirement payments to members

Thorntons Law LLP operates a contributory Group Personal Pension scheme for members of staff. Contributions to the scheme are charged to the profit and loss account when they become due.

1.13
Leases

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

1.14

Professional indemnity insurance and claims

The partnership maintains substantial cover through the insurance market. Provision is made on a case-by-case basis for the estimated costs of defending claims or the uninsured excess of such claims if greater, where it is probable that costs will be incurred.

Thorntons Law LLP
Notes to the financial statements (continued)
for the year ended 31 May 2024
- 19 -
2
Judgements and key sources of estimation uncertainty

In the application of the limited liability partnership’s accounting policies, the members are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources.

 

The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

Key sources of estimation uncertainty

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.

Useful life of tangible fixed assets

Tangible fixed assets are depreciated over a period to reflect their estimated useful lives. The applicability of the assumed lives is reviewed annually, taking into account factors such as physical condition, maintenance and obsolescence. Fixed assets are also assessed as to whether there are indicators of impairment.

Trade debtors recovery

Credit control is an important function which requires assessment, on an ongoing basis, of the recoverability of amounts due from trade debtors. Where recovery is in doubt, the management will adequately provide against this specific debt and will arrive at such conclusions based on the knowledge of the debtor and their “ability to pay”. The management adopt a prudent approach to credit control.

Amounts recoverable on contracts (work in progress)

As part of the year end process management are required to assess the ongoing performance of work in progress. This assessment results in the recognition of income and provisions against ongoing recovery depending on the degree of completion and the likelihood of a fee being raised. These judgements are made using the management's experience as well as a detailed working knowledge of the work being provided to clients.

 

In particular the LLP undertakes a number of engagements on a speculative “no win no fee” basis. FRS 102 requires that when the outcome of such a case can be estimated reliably, the revenue associated with the transaction should be recognised by reference to the stage of completion as at the year end. In addition, the costs incurred on these engagements can only be classified as an asset if they are both recoverable and can be measured reliably. As such, management are required to estimate the outcome of speculative engagements in terms of likely success and determine to what extent costs incurred at the year-end are recoverable and can therefore be recognised in amounts to be billed to clients within debtors. Management’s basis of measurement considers the nature of the cases, historic recovery rates and any specific issues identified in the post balance sheet period.

Accruals

Management estimate the requirements for accruals using post year end information and information available from detailed budgets. This includes provisions for dilapidations and claims. This identifies costs and income that are expected to be incurred or received for services provided by and to other parties. This includes the estimation of potential claims provisions which are based upon post year end information and management knowledge of the current status of live claims. Accruals are only released when there is a reasonable expectation that these costs will not be invoiced in the future.

Thorntons Law LLP
Notes to the financial statements (continued)
for the year ended 31 May 2024
- 20 -
3
Turnover

An analysis of the limited liability partnership's turnover is as follows:

2024
2023
£
£
Turnover analysed by class of business
Rendering of services
43,812,769
37,688,115
Rental income
120,733
105,847
43,933,502
37,793,962
2024
2023
£
£
Turnover analysed by geographical market
United Kingdom
43,933,502
37,793,962
2024
2023
£
£
Other significant revenue
Interest income
928,728
380,256
4
Operating profit
2024
2023
Operating profit for the year is stated after charging:
£
£
Fees payable to the LLP's auditor for the audit of the LLP's financial statements
30,870
29,400
Depreciation of owned tangible fixed assets
269,368
252,529
Operating lease charges
2,423,911
2,314,162
5
Employees

The average number of persons (excluding members) employed by the partnership during the year was:

2024
2023
Number
Number
Client service staff
249
247
Support staff
254
245
Total
503
492
Thorntons Law LLP
Notes to the financial statements (continued)
for the year ended 31 May 2024
5
Employees (continued)
- 21 -

Their aggregate remuneration comprised:

2024
2023
£
£
Wages and salaries
16,084,917
14,670,625
Social security costs
1,594,290
1,463,646
Pension costs
1,244,251
1,069,269
18,923,458
17,203,540
6
Members' remuneration
2024
2023
Number
Number
Average number of members during the year
69
67
2024
2023
£
£
Profit attributable to the member with the highest entitlement
375,358
268,930
Average members' remuneration
179,828
137,061
7
Interest receivable and similar income
2024
2023
£
£
Interest income
Interest on bank deposits
928,728
380,256
2024
2023
Investment income includes the following:
£
£
Interest on financial assets not measured at fair value through profit or loss
928,728
380,256
8
Interest payable and similar expenses
2024
2023
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
314,509
214,569
Thorntons Law LLP
Notes to the financial statements (continued)
for the year ended 31 May 2024
- 22 -
9
Impairments

Impairment tests have been carried out where appropriate and the following impairment losses have been recognised in profit or loss:

2024
2023
Notes
£
£
In respect of:
Fixed asset investments
12
50,515
-
Recognised in:
Amounts written off investments
50,515
-

The impairment losses in respect of financial assets are recognised in other gains and losses in the profit and loss account.

10
Intangible fixed assets
Goodwill
£
Cost
At 1 June 2023 and 31 May 2024
204,000
Amortisation and impairment
At 1 June 2023 and 31 May 2024
204,000
Carrying amount
At 31 May 2024
-
At 31 May 2023
-

The intangible assets relate to goodwill that arose on the mergers with Steel Eldridge Stewart on 1 September 2014, Clarkson Hamilton Limited on 1 June 2017, and Morisons LLP on 29 March 2019.

Thorntons Law LLP
Notes to the financial statements (continued)
for the year ended 31 May 2024
- 23 -
11
Tangible fixed assets
Property
Assets under construction
Fixtures and fittings
Computers
Total
£
£
£
£
£
Cost
At 1 June 2023
2,573,347
324,100
2,180,554
3,853,627
8,931,628
Additions
274,369
800
50,087
33,008
358,264
Revaluation
(5,000)
-
-
-
(5,000)
Transfers
240,420
(324,100)
52,198
31,482
-
At 31 May 2024
3,083,136
800
2,282,839
3,918,117
9,284,892
Depreciation and impairment
At 1 June 2023
1,594,591
-
2,106,030
3,781,834
7,482,455
Depreciation charged in the year
176,513
-
38,478
54,377
269,368
Revaluation
(6,300)
-
-
-
(6,300)
At 31 May 2024
1,764,804
-
2,144,508
3,836,211
7,745,523
Carrying amount
At 31 May 2024
1,318,332
800
138,331
81,906
1,539,369
At 31 May 2023
978,756
324,100
74,524
71,793
1,449,173

Property is comprised of freehold property with a net book value as at 31 May 2024 of £310,000 (2023 - £315,000) and short leasehold property improvements with a net book value as at 31 May 2024 of £1,008,332 (2023 - £663,756).

 

The freehold property is held in the name of nominated companies, in which members of the LLP are directors, with signed Declaration of Trusts in place passing the beneficial interest in the assets to Thorntons Law LLP.

 

On 31 May 2024 a valuation was carried out over the the freehold land and buildings by J&E Shepherd, Chartered Surveyors, a professional surveying firm not connected with Thorntons Law LLP. The value of £310,000 was made on an open market value basis by reference to market evidence of transaction prices for similar properties.

 

The historical cost of the freehold land and buildings included in the financial statements at valuation is £300,440 (2023 - £300,440).

12
Fixed asset investments
2024
2023
Notes
£
£
Investments in joint ventures
-
50,515
Unlisted investments
1
1
1
50,516
Thorntons Law LLP
Notes to the financial statements (continued)
for the year ended 31 May 2024
12
Fixed asset investments (continued)
- 24 -

The LLP owns 1,200 ordinary shares in Palea Systems Limited. The registered office of the company is Kinburn Castle, Doubledykes Road, St. Andrews, Scotland.

Movements in fixed asset investments
Shares in joint ventures
Other investments
Total
£
£
£
Cost or valuation
At 1 June 2023 & 31 May 2024
50,515
1
50,516
Impairment
At 1 June 2023
-
-
-
Impairment losses
50,515
-
50,515
At 31 May 2024
50,515
-
50,515
Carrying amount
At 31 May 2024
-
1
1
At 31 May 2023
50,515
1
50,516
13
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
6,717,301
5,423,795
Gross amounts owed by contract customers
8,603,444
7,383,224
Other debtors
2,332,798
1,930,537
Prepayments and accrued income
2,330,009
1,846,186
19,983,552
16,583,742

Included in other debtors is £Nil (2023 - £200,000) which is due in more than one year.

14
Creditors: amounts falling due within one year
2024
2023
Notes
£
£
Bank loans and overdrafts
16
2,271,500
1,500,000
Trade creditors
2,698,104
2,070,143
Other taxation and social security
1,623,325
1,569,989
Other creditors
755,971
716,524
Accruals and deferred income
575,414
573,917
7,924,314
6,430,573
Thorntons Law LLP
Notes to the financial statements (continued)
for the year ended 31 May 2024
- 25 -
15
Creditors: amounts falling due after more than one year
2024
2023
Notes
£
£
Bank loans and overdrafts
16
916,684
1,416,678
Other creditors
73,955
-
990,639
1,416,678
16
Loans and overdrafts
2024
2023
£
£
Bank loans
2,680,795
2,916,678
Bank overdrafts
507,389
-
3,188,184
2,916,678
Payable within one year
2,271,500
1,500,000
Payable after one year
916,684
1,416,678

The bank borrowings are secured by a bond and floating charge.

At the 31 May 2024 the outstanding bank loan relates to a £2,500,000 loan - repayable monthly over 5 years at a fixed rate of interest at 3.24% over base rate beginning from the start of the second year.

 

In addition to this, two loans were taken out during the year. The first loan was repayable monthly over 12 months at a fixed interest rate of 3.84%. The second loan is repayable monthly over 6 months at a fixed rate of 3.85%.

17
Contingent asset

At the year end, the LLP was in ongoing discussions with its insurers regarding business interruption linked to a third party supplier. The claim has been accepted by the insurer and an interim sum of £157,450 has been paid during the year ended 31 May 2024. The remainder of the claim is subject to continuing discussions and is therefore an uncertain future event not wholly within the control of the LLP, so no recognition of further possible proceeds has been made in these financial statements.

18
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
1,244,251
1,069,269

Thorntons Law LLP operates a contributory Group Personal Pension scheme for members of staff.

Thorntons Law LLP
Notes to the financial statements (continued)
for the year ended 31 May 2024
- 26 -
19
Financial commitments, guarantees and contingent liabilities

In the normal course of business, Thorntons Law LLP may receive claims for alleged negligence. Substantial insurance cover is carried in respect of professional negligence, and cover is written through the commercial market. Where appropriate, provision is made for the costs arising from such claims. Taking account of expected insurance recoveries, claims notified are not expected to give rise to any material unprovided liability.

20
Operating lease commitments
Lessee

At the reporting end date the limited liability partnership had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

2024
2023
£
£
Within one year
2,487,873
2,275,816
Between two and five years
4,872,437
5,979,855
In over five years
336,608
633,940
7,696,918
8,889,611
21
Capital commitments
2024
2023
£
£

At 31 May 2024 the limited liability partnership had capital commitments as follows:

Contracted for but not provided in the financial statements:
Acquisition of tangible fixed assets
-
87,379
22
Events after the reporting date

After the reporting date, Thorntons Law LLP announced a merger with Macnabs LLP which will see Macnabs LLP's 5 partners and 39 employees transfer to Thorntons Law LLP when the merger takes place on 31 March 2025.

Thorntons Law LLP
Notes to the financial statements (continued)
for the year ended 31 May 2024
- 27 -
23
Related party transactions
Remuneration of key management personnel

The total remuneration of employees and members who are considered key management personnel was £4,297,726 (2023 - £3,512,258).

Transactions with related parties

During the year the LLP charged Thorntons Investment Management Limited, a company in which members of the LLP, SC Milne and CS MacPherson, are directors, management fees and other charges of £223,327 (2023 - £255,228), and the LLP was billed £760 (2023 - £2,000) from Thorntons Investment Management Limited for investment services. The amounts due to the LLP at the year end were £254,022 (2023 - £240,069). Included within this balance is a loan of £200,000 at an agreed interest rate of 2.5% over the Bank of Scotland base rate. There have been no repayments made during the year in respect of this loan and the amounts are included in other debtors due within one year.

24
Ultimate controlling party

In the opinion of the members there is no ultimate controlling party.

25
Cash generated from operations
2024
2023
£
£
Profit for the year
12,408,112
9,183,090
Adjustments for:
Finance costs recognised in profit or loss
314,509
214,569
Investment income recognised in profit or loss
(928,728)
(380,256)
Depreciation and impairment of tangible fixed assets
269,368
252,529
Amounts written off investments
50,515
-
Movements in working capital:
(Increase)/decrease in debtors
(3,399,810)
23,442
Decrease in creditors
(211,295)
(1,035,530)
Cash generated from operations
8,502,671
8,257,844
Thorntons Law LLP
Notes to the financial statements (continued)
for the year ended 31 May 2024
- 28 -
26
Analysis of changes in net debt
1 June 2023
Cash flows
31 May 2024
£
£
£
Cash at bank and in hand
832,585
(624,510)
208,075
Bank overdrafts
-
(507,389)
(507,389)
832,585
(1,131,899)
(299,314)
Borrowings excluding overdrafts
(2,916,678)
235,883
(2,680,795)
Balances before members' debt
(2,084,093)
(896,016)
(2,980,109)
Loans and other debts due to members:
- Members' capital
(4,814,730)
112,750
(4,701,980)
- Other amounts due to members
(6,254,035)
(1,860,029)
(8,114,064)
Balances including members' debt
(13,152,858)
(2,643,295)
(15,796,153)
2024-05-312023-06-01falsefalseCCH SoftwareCCH Accounts Production 2024.310falseSO3003812023-06-012024-05-31SO300381bus:PartnerLLP12023-06-012024-05-31SO300381bus:PartnerLLP22023-06-012024-05-31SO300381bus:PartnerLLP32023-06-012024-05-31SO300381bus:PartnerLLP42023-06-012024-05-31SO300381bus:PartnerLLP52023-06-012024-05-31SO300381bus:PartnerLLP72023-06-012024-05-31SO300381bus:PartnerLLP82023-06-012024-05-31SO300381bus:PartnerLLP92023-06-012024-05-31SO300381bus:PartnerLLP102023-06-012024-05-31SO300381bus:PartnerLLP112023-06-012024-05-31SO300381bus:PartnerLLP122023-06-012024-05-31SO300381bus:PartnerLLP132023-06-012024-05-31SO300381bus:PartnerLLP142023-06-012024-05-31SO300381bus:PartnerLLP152023-06-012024-05-31SO300381bus:PartnerLLP162023-06-012024-05-31SO300381bus:PartnerLLP172023-06-012024-05-31SO300381bus:PartnerLLP182023-06-012024-05-31SO300381bus:PartnerLLP192023-06-012024-05-31SO300381bus:PartnerLLP202023-06-012024-05-31SO300381bus:PartnerLLP62023-06-012024-05-31SO3003812024-05-31SO3003812022-06-012023-05-31SO300381bus:LimitedLiabilityPartnershipLLP2023-06-012024-05-31SO300381bus:FRS1022023-06-012024-05-31SO300381bus:Audited2023-06-012024-05-31SO300381bus:FullAccounts2023-06-012024-05-31xbrli:purexbrli:sharesiso4217:GBP