Whilst studying for the GDL and LPC, the hot topic of conversation around law school was ‘Commercial Awareness’.  Everyone was keen to emphasise the importance of the need for students to be ‘commercially aware’ but there was very little understanding of what commercial awareness actually is.

At its most basic level, I would suggest that commercial awareness can be split into two categories:

• law firms functioning as a business; and
• understanding the needs of your client in a commercial context.

Law Firms as a Business

Students need to appreciate how a law firm operates and understand what is important to them for instance, profitability and cash flow.  Students should aim to demonstrate this understanding in front of an interview panel.  In order to do this students should carry out research into the background of a firm and look into:

• the context in which it operates;
• whether it has merged in the past; and
• what the firm’s strategy is for growth.

The Needs of your Client in a Commercial Context

Your client will not be looking for an academically sound answer to their queries, but one which is right in the context of their business.  Fundamentally, businesses exist to make money and they will be coming to you to help develop and progress their business rather than to learn about complex legal arguments.  Clients want a confident answer to their legal problems but will not be too interested in how you reached that answer.

In order to advise your client you need to know their objectives which will enable you to then tailor your advice accordingly.  Providing the best service to clients means not only advising on the law, but also understanding each client’s business and objectives.

Developing and Demonstrating your Commercial Awareness

You may think that you do not have any commercial experience.  However, you can use your legal work experience, your own research and other non-legal work experience in application forms and then discuss them at interview.  For example, whilst I was studying, I worked for a large well known bank.  I developed an understanding of the importance of customer service, the need to tailor your approach to each individual client, the market, the competition and targets.  I was able to use my understanding and experience of these areas of business to demonstrate commercial awareness at interview.

However, you do not need to work in the corporate world to develop such awareness.  You can pick up a lot of business knowledge by working in a cafe, for instance. Think about a beach cafe and how the weather affects custom and how the management of stock may be impacted.  Ultimately most jobs will assist if you reflect and think about what you’ve learnt and consider how you can then apply it in an application or at an interview.

You can also improve your commercial awareness outside of the working world by reading about deals and stories in a business sector that genuinely interests you.  This could be a football club’s administration for instance or the merger of two retail giants if you have an interest in fashion.  If you tailor your research in this way it will make the process more interesting and enjoyable and enable you to talk with enthusiasm at an interview.

There are other areas of life where you can also demonstrate your commerciality.  For example, consider whether you have ever taken part in any of the following activities:

• organised an event or trip;
• sat on university society committees;
• discussed budgets;
• Young Enterprise Award at school; or
• volunteered in an organisation.

It is important to remember that law firms require candidates to be commercially aware for a valid reason.  It is not something that you need just to get through the interview stage but something you will exercise on a daily basis when you start your training contract.  It is something that will constantly develop throughout your career as a solicitor.  You cannot advise your client sufficiently if you do not have an understanding of how they operate and what they are trying to achieve.

Once you have obtained your training contract you may find that your firm will actively get you involved in business development within the firm immediately by taking you to client events and marketing events.  Firms often send their trainees on client secondment to give them an insight into the commercial world.  I was lucky enough to be placed in house in a client’s legal team for two weeks whilst undergoing an extensive disclosure exercise.  This really gave me an insight on how the business worked on a day to day basis and helped me understand its goals and strategies.

I hope this has been of some assistance!

Until next month,

Kimberley