A Guide to Commercial Awareness

Why be commercially aware as law students?

Law firms of every kind, from high street and regional practices to the magic circle, expect you to follow the business news (the magic circle's love of the Financial Times is well known). But the term ‘commercial awareness’ can often confuse those applying for training contracts or vacation schemes. Lack of commercial awareness inhibits the students from getting training contracts or vacation schemes.

High Street and Magic circle firms look for different aspects of commercial awareness. However, commercial awareness is about needing to know the state of the legal market.

According to Stuart Malawer, professor of Law and International Trade at George Mason University, commercial awareness in a global context is necessary to adequately represent clients in international transactions. He states that mere legal knowledge is inadequate; understanding the industry and factors relating to it are equally important. He clarifies that commercial awareness is relevant if you are pursuing individual ventures globally or domestically – involving business or otherwise.

According to Dr Dan Awrey, associate professor of Law and Finance at the University of Oxford, commercial awareness is a term that is often used but seldom defined. According to Dr Awrey, commercial awareness is a lawyer’s ability to translate their legal expertise into better outcomes for the clients.

Andrew Austin, a graduate recruitment partner at Freshfields Bruckhaus Deringer, states that students should be able to demonstrate a genuine interest in the business world and an understanding of some of the significant issues. Candidates at the interviews are therefore asked more general questions, like why a company might be interested in selling its products in India/ China.

What is commercial awareness?

Being a commercially aware law student means understanding the environment in which law firms and their clients operate. As an aspiring lawyer, there is a need for commercial awareness and legal skills to help your employer and your client achieve their goals. Commercial awareness is an important legal skill across the legal profession.

There are two layers to commercial awareness:

• Understanding your client’s business - Understanding the client’s organisations and the markets they operate in enables the lawyers to provide quality advice that allows the client to achieve their aims. In today’s legal world, lawyers are also trusted business advisers, expected to be alert to the risks and innovative solutions that will benefit the clients. That is why lawyers were the first to be called when the government announced Brexit and the pandemic broke out.
• Understanding law firms as a business - Commercially aware candidates also appreciate that the law firms they are applying to are commercial enterprises. Whichever area of law a student decides to go into, it is imperative to demonstrate that you can drive the firm’s business forward. As an aspiring lawyer, you must understand the importance of client relationships and the need for businesses to be cost-effective.

How to develop your commercial awareness

To accelerate your level of understanding, it is essential to focus on the word ‘awareness’ and not to mistake it for ‘exhaustive knowledge’. As a trainee, there is no expectation to know everything about a client’s business from day one. However, a last-minute skim read of Financial Times is also not enough. It is crucial to get into a routine of following the business news, becoming aware of any patterns, trends or how wider economic conditions might affect a particular sector. A routine will enable you to develop a genuine interest, build your ability to spot trends, and you will take on the media habits of a good professional before you become one.

Andrew Austin recommends developing business-related and entrepreneurial skills through societies, and work experience can also help a law student develop commercial understanding. He advises students to watch the news, read broadsheets, and follow the Economist on Twitter to strengthen commercial awareness.

Furthermore, law students who have secured training contracts advise looking at law firms' websites for information about the deals they are working on and thinking about how law changes may affect particular firms in the future. It is essential to be on top of current affairs and how well the law firm is doing. It is also advisable to set up a Google alert which notifies if a specific relevant keyword or term appears in the news and to read Financial Times and Lawyer2b, which are free at the law faculty.

Being a lawyer requires far greater skill than merely knowing the law or quoting the statute. Employers need to be convinced that you are the candidate that will help the firm move their business forward beyond obtaining a vacation scheme or a training contract.

Along with The Student Lawyer’s own publications, here are places to develop good commercial awareness:

Radio and Podcasts

• Today Programme on BBC Radio 4: This is the most influential news programme in the UK dealing with current affairs in politics, business and society.
• World at One on BBC Radio 4: BBC Radio 4’s flagship news and current affairs programmes.
• PM on BBC Radio 4: Daily issues and excellent analysis with leading figures.
• FT News Briefing Podcast: Global business news every weekday morning from Financial Times’ newsroom.
• Business Daily Podcast: BBC World’s daily podcast on the world of money and work from across the globe.
• The Economist Podcast: This podcast offers current affairs on business, finance, science, technology and global issues.

TV

• Channel 4 News: Special reports to explain issues more deeply; this is one hour long.
• BBC 1 and 2: BBC’s business and economics team contributes to BBC news, blogs and stories on the BBC website.
• Bloomberg TV: Offers news from the Silicon Valley.

Press

• The Economist: Offers discounted trials or student subscription for full access.
• The Times: The Brief is a daily law newsletter that is sent via email.
• Financial Times: Good international features and interesting opinion pieces.
• Guardian: The Guardian’s Law section
• BBC News Website: Pitches many stories to non-experts in a clear and helpful manner.
• Wall Street Journal: Interesting to read about European issues from a different perspective.

Other:

• LCN’s Commercial Connect newsletter: The Law Careers.Net monthly newsletter summarises the latest commercial awareness content with tips and advice to develop your business acumen.
• Finimize: A free daily email that summarises the top financial news in three minutes.
• Social media: Following law firms, journalists, political commentators, business or law-specific twitter accounts like @ComAware_4S and @BBCBusiness
• The Commercial Law Academy: Comprehensive e-learning platform for aspiring commercial lawyers.
• Commercial Law Handbook: Jake Schogger, ex magic circle lawyer offers solid grounding in legal, commercial, financial knowledge required for commercial law interviews and internships.

For a regional or high street firm, commercial awareness often means the local economy, SME and owner-managed clients, and the regional deal scene.