Commercial awareness. We all want it. We all know law firms want it. But what actually is it? This article will aim to tell you just that. Following this, the next article will explain commercial awareness in the context of how lawyers and law firms implement it in their business practice in order to make it more effective. The third article will provide hints and tips for how law students can improve their commercial awareness. Finally, the last article will explain why commercial awareness is so important to have in our 21st century era of changes in the legal industry.
We all want it. We all know law firms want it. But what actually is it?
Whilst commercial awareness is a commonly used term in the world of business and law firms alike, a fair number of people cannot specifically identify its definition, therefore, it is important to clarify its meaning for the purposes of this exploration. The term has been specifically defined by Christopher Stoakes, a former banking lawyer at Freshfields, who described commercial awareness as being about understanding your clients, identifying with them, and assisting them in achieving their commercial objectives, goals and strategy. Commercial awareness has three broad aspects to it: the people you meet in business, understanding the businesses these people run, and of course, money.
The people – your clients
Firstly, it is about people – the people you meet in business, the ways in which you get these people to become your clients and how you get the work completed that they provide you with. This involves understanding your clients as people. The key to this is to think of your clients as friends as well as professional contacts. You will meet a vast number of people through the course of business in whatever field it may be, whether it be legal related or non-legal related. It makes sense that you must be a people-person in order to run a business effectively. Being a people-person involves making friends easily and getting along with a diverse range of people. Knowing your clients personally will create a much stronger bond between you and your clients, leading to increased business relations. Your clients are much more likely to keep coming back to your business and using your services if they have a more personal connection with you. Not to mention the power of word-of-mouth when they recommend your fantastic services and friendly attitude to their friends!
But how do you get people to become your clients in the first place? The answer lies in effective networking, providing high quality service, and of course, getting work done for your clients on time. Networking is a powerful tool for any business and one that will be explained in much more depth in the next article of the series. In simple terms, it is a word used to describe getting out into the market and building a range of business relationships – it begins as an attitude of mind. If you take this attitude of mind and implement it into your business, you’ll be sure to have clients left, right, and centre wishing to use your services. Once you have these new clients under your grasp, you can offer them your high quality services and get their work done for them on time. Word-of-mouth is sure to do the rest.
Your clients’ organisations
Secondly, it is about the businesses and organisations these people work in, what their strategies are, the ways in which they are organised and the issues and problems they come across – this is about understanding your clients as organisations. It is all well and good knowing your clients and having a solid personal connection with them, but what about their businesses and needs? Their business is the reason they are using your services after all. They have a business strategy just like you do, and they want to achieve it with the help of your services, whether it be legal services, financial services, delivery services etc.
You need to be aware of every type of issue or problem your clients’ businesses come across…
In order to remain as your clients’ first port of call when it comes to the specific services they require in order to achieve their business strategy, you need to really understand their business and put yourself in your clients’ shoes. It is not until you delve into the inner-workings of how your clients’ businesses function that you will be able to provide the services they want tailored to their specific needs. You need to be aware of every type of issue or problem your clients’ businesses come across, how you can help resolve them, and how you can better your own services in order to improve your clients’. Understanding your clients’ organisations is a vital part of being commercially aware and something that every business needs to have, particularly law firms. Once you are able to understand exactly how your clients’ businesses operate, they will thank you for it, and will be sure to keep coming back for more – which leads on to more of the next key part of commercial awareness…
Thirdly, commercial awareness is about money, which is both the purpose of business and what makes it happen – this involves understanding your clients as generators of profit and how money helps them expand. If you understand how your clients make money and how it helps their business to expand, you will be armed with the ability to make this happen for them through the use of your own business in the form of your services. If your clients make money using your services, you will generate more profit as they become dependant on you and your business in order to achieve a specific money generating part of their business strategy. Clients are much more likely to remain loyal to you and constantly use your services if you are able to understand their businesses and generate money for them. Remember, what goes around comes around, and your high quality money generating services will not go unnoticed and unrewarded.
Why is commercial awareness important?
The purpose of knowing these three aspects of commercial awareness is so that a business can engage with its clients. Your business can start to understand your clients’ commercial objectives and the problems they face, and ultimately, whatever it is that you supply helps those clients achieve their commercial aims. If all of these procedures are followed religiously by a business, your clients will put their full trust into you because you have the clients’ best interests at heart.
It is therefore vital that aspiring lawyers wanting to enter into a highly commercially-based industry have this highly sought-after commercial awareness. It is the key to how businesses work, grow, expand and generate profit, and an attitude of mind that every employer deems as essential. So, make sure you’re prepared for the inevitable commercial awareness based question at interviews and make yourself irresistibly employable by understanding commercial awareness and making yourself commercially aware.
Paige won the 2013 Clarke Willmott LLP commercial awareness essay competition entitled ‘Commercial awareness for the 21st century lawyer’.
This article was originally published in October 2013.