Dundee law firm Thorntons is on course for its largest ever year after announcing a turnover of almost £38 million in 2023.
Newly filed accounts show the business increased its sales to £37.8m for the year ending May 31 2023, up from £34.9m in 2022.
And the business – which has more than 500 staff across offices in Tayside, Fife, Edinburgh and Glasgow – expects sales of around £40m in the current financial year.
Despite the increase in sales, profits before members’ remuneration and profit shares fell from from £10.1m in 2022 to £9.2m last year.
Managing partner Lesley Larg said this was partly due to investments made.
The company recently opened offices in Glasgow’s George Square, as well as acquiring 11 new partners from Inverness firm Wright Johnston McKenzie.
A “benchmarking” of salaries and the creation of 10 new positions also contributed to an increase in costs, she said.
Sustainable growth
Ms Larg said Thorntons was looking to build for the future, and despite a “short-term” impact on profit being recorded, long-term gains are likely.
“The business has, in the last couple of years, been focussed on building for the long term, making the business sustainable for everyone,” she said.
“There is a lot of change coming in the legal profession — the use of emerging technology, experimentation with AI.
“Also with recruitment and retention, there is a lot of movement in the marketplace so attracting and obtaining talent is really important for us.
“The decisions we have made around opening really good offices t, big investment in salaries, in IT and environmental, social and corporate governance reporting, have a short-term impact on profit but a long-term benefit in sustainability for the business and everyone in it.
“The partnership are very comfortable with that.”
Thorntons Highland expansion
The recent opening of an Inverness office highlights Thorntons ambition to remain an independent Scottish firm, Ms Larg added.
“We just had an 11 person team join us all at once from Wright Johnston McKenzie, an Inverness firm taken over by Sheffield firm Irwin Mitchell.
“There were a group of partners there who considered what would be best for them, and their clients, going forward.
“Ultimately it lead to them joining us, which has given us a brilliant start in Inverness.
“With this expansion, we have consolidated our expertise.
“There is now not any scale of work or project we would not take on, we really can cover every aspect in the commercial market.
“We are also incredibly proud of the services we can offer on a personal level, like wills, power of attorney, child contact etc.”
Mergers and acquisitions
Mergers are becoming more commonplace in the industry, Ms Larg notes, which she suggests will continue for some time.
Despite a number of English and international firms moving north of the border in search of companies to buy, Thorntons will not be looking to acquire any firms in England or overseas for now.
“There is a lot of consolidation in the marketplace,” Ms Larg said.
“Some of it is English and international law firms who think the cost-base is cheaper in Scotland but the skillset is really good. That is why we have seen English and international firms move into the Scottish marketplace.
“Increasing regulation, and the investment required just running a law firm, is proving tougher for a lot of firms. Some also have succession issues, with ageing partnerships.
“There is a variety of reasons which have started a spurt of consolidation and I think that will continue.
“We are firmly focussed on Scotland as our marketplace.
“There are a number of referral partners in England and Wales, who if they have a Scottish legal element in their work we partner with them, rather than be in competition with them down south.
“We are independently owned. We are not planning on being swallowed-up or taken over by anyone else.”
