Commercial awareness is a buzzword that all law firms are expecting from their training contract applicants and trainee solicitors. It’s a key part of any applicant’s skillset, but because the words ‘commercial awareness’ are so vague, simply adding the phrase to an application does not add value by itself. The true skill is being able to demonstrate that, as a candidate, you are ‘commercially aware’.
A useful way to add some clarity and real-world examples of commercial awareness is to split it into two aspects:
Commercial awareness in its overall sense applies to all businesses and industries. Understanding the basics of how businesses operate and the challenges they face is a necessary attribute for any solicitor.
One side of this is understanding some economic fundamentals. Even some basic concepts can assist your understanding of how businesses come to make decisions. Personally, I found the optional ‘Business & Law’ module on the LPC a great introduction to some of these principles, which were new to me. Equally, there are often university modules and online resources which are geared to giving you an insight into some of the basic but key concepts.
One of the best ways to improve general commercial awareness is to keep up to date with recent developments in various markets. Use media streams that fit in with your everyday life; if you are a runner there are lots of great podcasts on different topics, if you use social media there are plenty of channels that you can follow on your feed, and there are even mobile apps which provide notifications on markets or finance which you can tailor to your preferences. Choosing methods that fit in with your existing routine and focussing on the areas of business in which you already have an interest will all help to boost your commercial awareness naturally.
A broad understanding will provide you with a higher level of business awareness when working in the legal sphere. You will also be able to get involved in discussions and create connections and opportunities that may not have existed otherwise.
The first key consideration is how the law firm itself operates. Current and future challenges in the legal industry are often seen as one of the most important aspects of legal commercial awareness. However, understanding how law firms actually operate is often overlooked by training contract applicants. It wasn’t until I looked into legal benchmarking reports that I really understood what keeps law firms operating.
Legal benchmarking reports provide detail on some of the key financial indicators that law firms monitor among their staff and show how different types of firms have performed each year. There is a real benefit in getting to grips with some of these indicators and understanding why they are so important to law firms.
These reports often provide a useful breakdown of the meaning of such indicators. As a trainee, you will quickly encounter key financial phrases frequently such as ‘WIP’ and billing. Gaining a solid understanding of such phrases before you embark on your training contract can help make sense of the commercial side of the job.
The type of client you will be dealing with depends largely on the type of firm you join and the department you are in. Understanding what is impacting those specific clients is key to any solicitor’s role. Being aware of what is going on in each client’s wider industry is paramount to delivering an effective client service.
If you are interested in one or two particular areas of law, then try researching clients in that department of your chosen firm and understand what is currently impacting them specifically. This can demonstrate to an employer that you are aware of the challenges facing their clients, and is good practice before you start your training contract.
Keeping up with relevant business affairs is a process you will continue throughout your legal career and it is a good idea to start sooner rather than later.