In today’s competitive market, obtaining a top classification in your degree is no guarantee of a top job. Employers, now more than ever, are asking candidates to show that they have a little bit extra to give rather than just academic knowledge. Commercial awareness is a phrase that is often batted about in job applications in various industries, but not many people actually know what it means specifically. It is required for every job application that you do, but if you don’t know what it means then how can you answer correctly? Employers see it as an essential skill and without it, you could be hindering your chances of securing that graduate job.
What Is It?
Generally commercial awareness is seen as having the knowledge of the industry specific to the job you are applying for. It basically means having the knowledge of how a business works and knowing the day to day happenings in the world of business. This skill will rarely be developed through the education system without some extra effort. It requires you to know about the latest mergers and acquisitions, the winners and losers of certain industries, and knowing the make-up of business sectors and the situation of the main players.
A significant portion of law revolves around business so a broad knowledge of the business world is highly necessary, and also awareness of political events are especially key for a job in law in particular.
In the legal sector some see commercial awareness slightly differently, and there are two main elements:
Firstly you can’t forget that a law firm is essentially a business and still operates for a profit, therefore decisions are made in order to increase the firm’s success against competitors. You need to understand all the factors that could affect a law firm and its economic situation.
Secondly a job in the legal profession will contain a lot of contact with clients who require advice on their legal issue and obviously they want the best advice possible. What this means is that if a client is happy then the more likely they are to continue to use the firm. This is a general rule of business in the services industry, and of course the advice you could give them could just be the standard law, and the various possibilities that could arise from that. Alternatively, you could give them the standard law and then possibilities specific to their business and how it could affect them in what is a very competitive marketplace. This then can save them some leg work and, depending on the size of the company, it could help them out massively. Lawyers are now ceasing to just give out the law as it is, as their modern rule is more about being a hybrid business advisor who gives the whole package.
This illustrates that law firms are trying to compete in a highly competitive industry, and by expanding their advice, this makes them more attractive to new clients. Therefore they require new recruits to be very knowledgeable in this area.
How to Gain Commercial Awareness
This is something that has to be developed and cannot be gained overnight. There are luckily many ways to develop your commercial awareness:
Generally the easiest and most mainstream way to develop this skill is to read up in books and newspapers, finding all the relevant information of companies, in a variety of different sectors. Business sections of newspapers and news websites are a great starting point.
The modern business world moves incredibly quickly. It is therefore a bit pointless if you have spent a lot of time researching the basics, only to find that it is now it is out of date, because you have missed many new deals that have occurred. Being aware of the latest deals and new transactions is essential for commercial awareness. All it takes is a quick look at a few business sections of news websites a couple times a day and you will be up-to-date with the latest insider knowledge.
This is the best practical way to boost your commercial awareness. This experience does not necessarily need to be gained in the legal sector, as any practical knowledge of how a business works is a bonus. Internships are also a brilliant way to boost your CV. These can usually be completed in the summer holidays and can also offer a great insight into a particular sector that interests you.
Nowadays most people are a member of at least one Social Network, and these can be a fantastic way to get updates on business news. On Facebook and Twitter, you can like or follow pages from The Financial Times, The Telegraph, The Times and many more. They will give updates of big headlines news with links to the full story, however with the caveat that some may require you to pay for full access. You can also get updates from many law firms, this will allow you to get more knowledge of what the law firm does which, in-turn, will help you with applications to those firms. The Law Society and the Solicitors’ Regulation Authority are also on twitter and post regular updates about the industry. LinkedIn is another tool that can help you. If you do not have a LinkedIn account then it is best to set one up soon, this allows you to connect with law firms and with solicitors and barristers themselves. It essentially acts as your online CV, so make sure it looks good!
Here at the Student Lawyer we offer many articles including Deal Reports, which are an analysis of the latest business deals and how they have shaped the marketplace; Business News Reports, these daily articles give you a short description of the biggest business news headlines; and Industry News Reports, which give all the latest on the legal industry and how it is changing. Don’t forget to sign up to get daily emails, and also to like our Facebook and Twitter page!
How to Show Commercial Awareness
It is incredibly likely that at some point during the application process for a job in the legal profession you will be asked to prove your commercial awareness. It’s possible that you make have to answer a written question in the application form, such as being asked to discuss a piece of recent business news and maybe even give your own opinion on the effects of the news. You could also be asked a more general question about the marketplace or economic climate. Another question could be one about the law firm you are applying for and also about their competitors. This is seen as the easy stage, at the interview stage your commercial awareness will be really put to the test.
When you get to meet the professionals in the interview, they will be on the lookout for the best example of commercial awareness that they can find. The best way to impress them is to have at least one well-practiced and well-rehearsed example to prove your commercial awareness, and this means spending time on your preparation, rather than just quickly glancing at the business headlines the day of the interview. Good presentation of your example, combined with an articulate response, should help you in getting ‘brownie points’ in the interview. However it is important to know that just having knowledge that the biggest business buyout in history has occurred isn’t going to cut it. Everyone will know about it, so you will need to show that you understand the deal and can analyse what actually happened. This will then demonstrate that you have the skills to go above and beyond what is required of you.
This might sound scary but don’t worry, once you get into the swing of it, keeping up to date with business is easy enough. All it takes is a rolling knowledge of new business transactions and market news, which mean when you are faced with an upcoming interview, you can start preparing a decent answer safe in the knowledge that you are commercially aware.