Commercial Awareness Series (Part 4): Why is it so Important?

Commercial Awareness Series (Part 4): Why is it so Important?

The third article in the series provided you with hints and tips as to how you can go about improving your own commercial awareness. It aimed to prepare you for those all-important interviews with law firms and ensure that you are more than ready for those inevitable commercial awareness based questions. Developing techniques is all part of commercial awareness for a lawyer and how they use these techniques is essential to becoming a solid competitor in today’s intense 21st century industry. So, why is commercial awareness so important to have in today’s business climate? This article in the series will aim to tell you just that. You can read the rest of the series here.

The 21st century is changing rapidly and lawyers need to be aware of some of the changes that are occurring and what it means for their business. They must also understand how commercial awareness can be used to stay ahead in one of the most highly competitive times for business. So, what are the changes and how can commercial awareness help to deal with them?

Alternative Business Structures (ABS)

The introduction of the Legal Services Act 2007 has begun to change the way legal services are delivered in England and Wales – one of the biggest changes is the introduction of ABS. The Law Society describes an ABS as a ‘regulated organisation which provides legal services and has some form of non-lawyer involvement’. According to The Law Society, the Solicitors Regulation Authority (SRA) claims that ABS will ‘allow non-lawyer organisations to provide legal services, and lawyers much greater flexibility in the way they practice’. They also claim that ‘the introduction of ABS will allow much wider options in how lawyers and non-lawyers can share the management and control of a business which provides reserved legal services to the public’.

From this information, it is clear that the introduction of ABS has both its advantages and disadvantages. The sole reason for suggesting the introduction of ABS was to allow free competition in the marketplace by permitting non-lawyers to provide legal services. The Legal Services Board suggests that non-lawyers in the marketplace will lead to ‘stronger emphasis on delivering quality services at a lower cost and in a convenient way to the consumer’. The idea behind this is that big brands will bring with them a brand new focus on customer service, and that this will force traditional law firms to raise their game in response to this.

So what does this mean for law firms? It means that competition will be higher than ever and therefore commercial awareness is needed if there is any chance of competing. Indeed, Elisabeth Davies, chair of the Legal Services Consumer Panel says:

‘Consumers are demanding more of their legal providers – the businesses which succeed post-ABS will know what their customers want and deliver services that meet their needs’.

In other words, the law firms who have highly-skilled lawyers with commercial awareness will succeed. Big firms like The Co-operative have already introduced their own legal services (The Co-operative Legal Services) that is proving to be tough competition for law firms alike. However, Law Society President John Wotton believes that ‘the future will still be bright for solicitors who are innovative, consumer-focused and highly regarded in their local communities’.

The introduction of ABS will increase competition for traditional law firms and lawyers that are part of them. Commercial awareness, if used effectively, will help law firms to remain competitive during this on-going renovation of the legal industry.

Legal Aid Cuts

A change implemented in April 2013 was the cuts made to legal aid, as a result of the Legal Aid Sentencing and Punishment of Offenders Act 2012 (LASPO). The legislation removes categories of law from the scope of legal aid including employment, welfare benefits, clinical negligence, most debt work and most education work – this effectively restricts access to justice for consumers who cannot afford it (see an overview of the reforms here). For firms doing private family and social welfare law work on legal aid, these changes will be revolutionary. If a lawyer does find that their client is not eligible for legal aid, the client is therefore unlikely to be able to afford the legal services needed. There is a real challenge here to provide a service that will be useful to these clients and something that they can afford.

The Law Society proposes that there are many ways a lawyer can provide affordable services to a client. One way is to ‘have a menu of services at fixed prices, allowing clients to pick and choose which services they want’. They propose that lawyers could have separate fixed fees for ‘drafting an application to court, preparing a witness statement, and representing the client in court, with various package deals for multiple services’. For those within the legal aid eligibility limits, these services can be made more affordable by lawyers, perhaps offering a reduced price for those clients whom they have assisted with help with mediation. For these clients, legal aid will already have paid for part of the initial information gathering, meaning the lawyer will therefore not need to recover the cost of doing so within the fixed fee that is charged.

Another way in which a lawyer can provide affordable services to a client is through the use of technology. The Law Society claims that ‘the legal profession has only scratched the surface of what it can do with technology’. For example, law firms could develop a webinar that walks clients through what they need to do to lodge an employment tribunal application and many people may be willing to pay a small fee to view it. Any topic where a lawyer finds themselves giving similar information to different clients may lend itself to this approach. As well as becoming a small but steady stream of income, this approach could attract more people to a lawyer’s or law firm’s website, leading to the acquisition of more potential clients.

According to The Law Society Head of Legal Aid, Richard Miller, the key to operating in this new world will be to:

‘focus on the elements where your [a lawyer’s] expertise is most vital, and to find ways of being paid a reasonable amount for that, stripping out as much of the extraneous cost as possible, and delegating what still has to be done to the lowest level possible consistent with meeting [a lawyer’s] professional obligations and delivering a service at a quality commensurate with the price’.

In short, this means the key to success in order to cope with the changes being made to legal aid is for a lawyer to have commercial awareness. A lawyer must use this awareness effectively in order to compete and attract clients away from the temptation of affordable ABS providers, and towards traditional legal firms.

Social Media

Facebook, Twitter, LinkedIn: there are a vast range of social media sources out there, right at a firm’s fingertips. The influence of such sources has increased drastically over the past few years and is continuing at an overwhelming rate. Our society has become a ‘cyber-world’, somewhat dictated by what we see and do on social media. It is a very powerful tool – if used effectively. The world of social media acts as a free form of advertising to an exceptionally wide market of potential clients and law firms should grasp it with open arms. Take Twitter for example, it has over 500 million active users – an incredibly large pool of potential clients. It makes sense to reach out to these clients through a source that they feel completely comfortable with and are using on a daily basis. This is why so many law firms are acting upon their commercial awareness and are now making their mark on social media sites like Twitter, posting regular updates regarding their services and how they can help potential clients. It is advertising at its best; even better it is completely free, leading to maximum potential profit for law firms.

Lawyers with commercial awareness can help to reach out to potential clients through social media. Posting regular updates, delivering information and having a fantastic online presence all contribute to a firm’s reputation. In turn, this can lead to the acquisition of more and more clients and hence more productivity for the firm.


In conclusion, this series has outlined what commercial awareness is and what the three main aspects to it are for every business. It has contextualised what commercial awareness means to a lawyer and how they can use it. Finally, it has described some of the changes occurring in the 21st century which lawyers should be aware of and how they can use commercial awareness to their advantage during this time of change in order to remain competitive. Techniques such as networking, advising clients, writing to clients, establishing USP’s and strategies of a lawyer’s business and their clients’ businesses have all been described and can all be used as part of a lawyer’s commercial awareness. Changes occurring in the 21st century have been discussed, including the influence of social media, the proposed cuts to legal aid and the introduction of ABS and how traditional law firms can cope with these changes to remain competitive, through the use of technology and fixed fees. Ultimately, commercial awareness is an attitude of mind – something that a lawyer absolutely needs in order to compete in our ever-changing legal world. So, make sure that you have it!

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