Are you commercially aware?

We've said it before and here we are saying it again. Commercial awareness is one of the key skills that law firms look for in future trainees and thus, if you are to succeed, you will need to develop this particular skill.

To persuade a recruiter of your commercial awareness, you need to develop a genuine interest in the business world. Without one, you are unlikely to maintain enthusiasm for a career in commercial law or properly understand what your clients want to achieve. Even if you intend to train as a private client lawyer, you need to be able to understand clients who are themselves business owners. A candidate who enthusiastically engages with the daily gyrations of commerce represents a future lawyer with the capacity to develop new client relationships and, perhaps, even new legal products and services. In short, they represent a safer investment.

What is it?

Commercial awareness can be described as an understanding of the business environment within which a law firm and its clients operate. For commercial lawyers, it is the ability to understand a client’s business needs so that the legal advice you provide is constructive and appropriate to those aims. Whichever area of law you decide to go into, you will need to demonstrate that you are commercially aware in order to convince law firms that you are going to be able to help drive their business forward, beyond just securing your training contract.

To break things down, you will need to demonstrate that you understand the importance of client relationships and the need for businesses to be cost effective. A commitment to your firm's strategic vision and a good grasp of market factors (internal and external) are really what’s required. With this in mind, you need to be able to demonstrate that you can:

  • manage your time effectively;
  • demonstrate initiative;
  • work well within a team;
  • develop good client relationships; and
  • demonstrate a good understanding of the current economic conditions and well-developed legal knowledge.

Learning more

There are things that you can do to help increase your levels of understanding. It is important to focus on the word 'awareness' and not mistake it for the word 'knowledge'. Remember that you are going to be a trainee and are not expected to know everything about the law firm or its clients’ businesses from day one.

Commercial awareness for a future lawyer might be sensibly split into two categories: things that relate to law firms as businesses themselves, and things that affect the clients for whom the firms work. In the first category, a student should have at least a basic understanding of the purpose of the Legal Services Act 2007, and a general understanding of what a partnership is and how law firms are traditionally structured. It will help, too, to have a sense of how legal work and clients are sourced and charged. If a student hopes to work for an international law firm, then it’s essential to have a sense of what a target firm's international network looks like and why it is shaped as it is. This is easier if you have a reasonable understanding of the shape of the world economy. What are the BRICS? What is an emerging market? What have been the consequences of the 2008 financial crisis for businesses and regulators? What caused that financial crisis? Why is austerity the watchword of the decade so far? What is the alternative? These topics are covered extensively in the media, often very well.

However, a last-minute skim of the Financial Times before your interview will be of limited use. You should get yourself into a routine and then stick to it. This approach enables you to develop genuine interest and a knack for spotting themes and trends. You will eventually be able to see things from a business person’s perspective and develop a more connected understanding. In short, you will take on the media habits of a good professional before you become one.

Below are some recommendations of good places to start learning:

Radio: BBC R4 and the World Service

Today programme

Today is the most influential news programme in the United Kingdom and sets the day’s political agenda each morning. If you want to quickly build awareness of current affairs in politics, business and society, listen to this programme. 

The World Tonight

Broad coverage of international news and business.

The Bottom Line

Evan Davis' roundtable interviews get to the heart of business thinking.

Peter Day’s World of Business

Veteran business journo Peter Day’s show includes on-the-ground stories from around the world.

Today in Parliament

Discover whether or not our parliamentarians are out of touch or have their finger on the pulse.

World Business Report

Daily stories from around the world.

PM

 

The World at One

Eddie Mair presents an irreverent, but probing look at the day’s issues - excellent journalism and interviews with leading figures.

One of BBC R4’s main flagship news and current affairs programmes, along with Today and PM.


TV


Channel 4 News

The hour-long show allows time for special reports to explain issues more deeply – by far the best news journalism on British TV.

BBC

The BBC’s business and economics team contributes regularly to BBC News and also has blogs and stories on the BBC website. 

Look out for reports and blogs from Kamal Ahmed. Follow him on Twitter. Tune in to The Andrew Marr Show for interviews with leading figures from politics and business – or its ITV rival, Peston on Sunday. The Beeb also makes some good one-off documentaries/short series about world economics and business.

Bloomberg TV

Bloomberg West is a tech-tastic one-hour show, offering all the news from Silicon Valley.


Press


The Economist

Try discounted trial or student subscription for full access, or choose your limited free reads carefully. The app is free to download.

The Telegraph

Partial pay wall. Many people (even lefties) really rate the Saturday edition.

The Times

Pesky pay wall! The Times Law supplement is published on Thursdays.

Financial Times

Pay wall (can read some material free). Good international features. Interesting opinion pieces.

Guardian

The Guardian law section used to be very well regarded, although there are claims of a slip in quality since it lost its dedicated team of writers. But there’s no pay wall!

Reuters

Heavy on the financial markets and good for fast news reports.

Wall Street Journal

Interesting to read about European issues from another perspective.

BBC News website

Pitches many stories at the non-expert, but this can be really helpful.

Past experiences

Another way of assessing your levels of commercial awareness is to think about what you already know. Consider your employment history and see whether you can identify any previous examples of commercial work experience. For example, have you worked in a service environment? Did you gain insight into how the business you were working within was run? Have you ever undertaken a specific project or devised a solution to a business problem? Was there a particular challenge that you had to overcome?

It is not only your employment history that counts as commercial work experience. Positions of responsibility can also demonstrate that you have the necessary skills. Did you belong to any societies at university and if so, what was your role? For example, if you were the treasurer of a sports club, this can be used to demonstrate your ability to manage finances and budgets.

Not-for-profit work can also be used to demonstrate commercial awareness as, depending on your role, you may have been involved in promoting events or persuading companies to sponsor you or provide free products. These activities help to show that you have an understanding of basic business processes. Working within the family business or setting up and managing your own business (even online) can all point to commercial nous, as there is no better way to understand the fundamentals of a business than by running one.

New experiences

In addition to looking at what you have done already, you may want to increase your levels of awareness by undertaking some useful employment while you study or after you have finished your degree or Legal Practice Course. The first step is to assess yourself. Consider what area of law you wish to practise, the type of firm you want to work in and which skills you may be lacking. Next, work out where you could gain the skills that may be relevant to the firm of your choice. For example, if you are interested in banking or corporate finance, then consider gaining experience in a corporate setting (eg, an accountancy firm or a tax office).

Commercial thinking can be developed in any employment setting, particularly if your role allows you access to the rationale for decisions made by your employer. For example, in the publishing industry, you might learn about the challenges faced by print media in light of the growth of online journalism. If you work in retail, logistics or warehousing during your holidays, you could develop an understanding of, say, the seasonality of demand or just-in-time purchasing principles.

Another option is to consider the types of client that you would be dealing with in a corporate law firm and try to gain some experience (eg, in a bank or financial institution). If you can gain insight into how potential clients run their businesses, this will be a strong selling point at interview. Alternatively, think about how a corporate firm is run and the skills you would need to work there (ie, working on large complex deals as part of a large team). Use this basic idea to think laterally about other organisations which would allow you to work in the same way (eg, insurance companies or finance houses).

Ultimately, what matters is that you learn about and understand the environments you work in. Even positions which appear to be at a very low level can produce great commercial insight.  It just depends which way you look at it and how well you can explain your understanding to a potential recruiter.

For more on developing commercial awareness, read this short article on how you can access commercial analysis through LawCareers.Net and watch this video on how to make big improvements to your knowledge if you’re just starting out. Meanwhile, our blogging community has shared plenty of commercial awareness advice that’s worth reading.

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