When you start applying for training contracts (or vacation schemes) with commercial law firms, people will tell you that you have to show “commercial awareness”.
What is commercial awareness and how do you show that you “have” it?
If you do an internet search on “commercial awareness”, you’ll find that different people have different views on commercial awareness and what it means.
Therefore, it’s important to ensure that you cover all the angles and take a good look at the various issues that may arise.
What Commercial Awareness is Not
Commercial awareness is not just reading the Financial Times the day before the interview or when preparing an application.
Keeping abreast of current affairs IS important, and if you want to work in the City, the book “All You Need To Know About The City” by Christopher Stoakes is a good starting point to understanding the wider picture. Equally, the same author’s other book “All You Need To Know About Commercial Awareness” is a well worth a read.
Most people talk about commercial awareness in the context of understanding the macro-economic picture. It is obviously helpful to understand why inflation goes up and down, why recessions happen etc and it is useful if you have studied economics or business studies.
Interestingly, in September 2012, Enterprise Nation reported that Government economic forecasts play little part in the planning and decision making of UK businesses – and around half of firms feel that official forecasts are not relevant to them. So understanding the bigger picture that your clients may show little interest in is important.
As a trainee, you are unlikely to be involved in the strategic direction of a business, and therefore, I think it is even more important to understand what makes a business tick day to day.
Perhaps the phrases “business awareness” and “business acumen” are better descriptions of the type of knowledge you will be expected to have.
True Commercial Awareness
I would argue that commercial/business awareness involves having a good dose of common sense, coupled with an understanding that the fundamental truth is that businesses exist to make money.
Some may pride themselves on being ethical or providing world-class customer service, but ultimately they all want to make a profit and maintain their cash flow and everything they do will be geared to those aims.
Businesspeople don’t like red tape, and there’s a lot of it about. In 2011, the Telegraph reported that small businesses carried a regulatory burden of £16.8 billion a year. In fact, the Government has been carrying out its “Red Tape Challenge” to find out where the law does more harm than good and where people think that the law should be reformed.
Working As A Commercial Lawyer
When you’re a lawyer working with commercial organisations, your job is to cut through that red tape and help your clients make money without getting into trouble with the regulatory authorities, or more seriously through the courts.
Businesspeople dislike red tape, and they dislike lawyers telling them they can’t do things because of it even more. It’s not uncommon for the legal department to be called the sales prevention team.
Therefore you need to be able to find solutions that allow your clients to achieve what they want to achieve in a lawful and commercially sensible way.
To take an example, it’s no good having large disclaimers on the homepage of a website as users don’t like them. They may need to be there, but you need to find a way that complies with the law without alienating customers.
Tips On Improving Your Commercial Awareness
Below I will give you my five top tips on how to gain experience and knowledge that will help you improve your commercial and business awareness.
Current Affairs Knowledge As A Minimum
I feel very strongly that being commercially aware can’t be achieved just from reading newspapers, but it is a good starting point to understanding the wider picture.
You will also need to keep up to date with what’s going on in the legal world by reading the legal press, such as The Lawyer and Legal Week, and the law pages of the Times and the Guardian.
Understanding The World of Business
Apart from that, what will really help you to understand the business world better? Here are five tips:
1. First Hand Legal Work Experience
Get onto a law firm vacation placement or go to a law firm presentation or an open day.
The best-organised ones will offer presentations on various topics which will be useful in understanding the wider picture. Less organised ones will throw you in at the deep end and may in actual fact offer more useful and commercial experience because you get to do real work.
Working in a law firm will also help to demonstrate your career motivation and that you are serious about wanting to become a solicitor.
2. First Hand Business Work Experience
The ideal solution here is to try to get a job in a commercial organisation during the summer vacation.
Gaining experience in, for example, the accounts or marketing departments of a large plc or indeed a small local company will really help. Ideally, these opportunities will be paid, but there are always unpaid internships if you are financially able to take them.
To give an example, imagine the business sends out letters to customers with legal disclaimers on them. You need to change those legal disclaimers but the IT systems won’t allow that to happen quickly because the parts of the letters with the disclaimers on are hardcoded and can’t just be edited.
What do you do? Being able to solve problems like that is a large part of being commercially aware.
However, don’t despair if you can’t get this kind of role – it is difficult in the current economic climate and not everyone can finance an unpaid internship.
3. Other Work Experience
As a student or graduate it should be relatively straight forward to pick up work in a bar, a shop, a factory, or somewhere similar.
You can pick up a lot of business knowledge just working in a cafe, for example. Think about a beach café and how the weather affects custom and how your management of the stock may be impacted.
Ultimately most jobs will help – you just need to reflect and think about what you’ve learnt and how you can apply it in an application or interview.
4. Extra-Curricular Activities
Have you organised events or trips?
Have you sat on university society committees and talked about budgets?
Did you do Young Enterprise or similar at school?
Have you volunteered in any organisation?
Even volunteering in a non-commercial organisation may help – for example, museums have shops and sell products to visitors. What do they sell and why are those products the most popular?
5. Further Education & Self-Development
You could take an evening class or distance learning course in accounts, marketing or similar business discipline.
Again, there may be financial or time constraints here as budgetary cuts have led to further education courses becoming more expensive, and you might need to concentrate on your studies. But you must look at your options and whether you can fit something in.
I did a French course through York University’s lifelong learning programme while doing my LPC at the College of Law there and it did not cause me undue stress or pressure. It did, however, give me a useful extra qualification and skill when I started my training contract at a Magic Circle firm.
I hope that these tips have given you food for thought and some guidance on where you can develop that mysterious “commercial awareness”.
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