What is commercial awareness and how do you show that you “have” it?
What is Commercial Awareness?
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, its 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.
It would probably be a good idea to take a look at the Red Tape Challenge website and have a look at some of the views expressed by businesses, employees and consumers to understand the issues before you go to any interviews.
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
In my next post, I will give you five tips on how to gain experience and knowledge that will help you improve your commercial and business awareness.