When it comes to gaining a training contract one of the essential tools in any applicant’s skill set has to be ‘commercial awareness’. Legal recruiters seem to place great emphasis on this elusive expression yet many would-be applicants seem perplexed as to what it is and how they can get some.
As most law firms either run themselves as a business or engage with commercial clients, commercial awareness is essential if you are going to succeed in the legal profession today.
Commercial awareness can be described as an understanding of the business environment within which a law firm operates. For those firms that deal with commercial clients it can also extend to you being able to understand a client’s business needs so that the legal advice you provide is contextualised appropriately. Whichever area of law you decide to go into, you will need to demonstrate that you are ‘commercially aware’ in order to convince legal firms that you are going to be able to help drive their business forward, beyond just securing your training contract.
So to break things down you will need to demonstrate that you understand the importance of client relationships and the need for businesses to be cost effective. A commitment to your firm’s strategic vision and a good grasp of market factors (internal and external) are really what’s required. With this in mind you need to be able to demonstrate that you can:
- manage your time effectively
- demonstrate initiative
- work well within a team
- develop good client relationships
- possess a good understanding of the current economic conditions
- possess well-developed legal knowledge
If you are reading this and currently thinking that you have very little commercial awareness then rest assured that there are things that you can do to help you increase your levels of understanding. It is important to focus on the word ‘awareness’ and not mistake it for the word ‘knowledge’. Remember that you are going to be a trainee and are not expected to know everything about the law firm or their clients’ businesses from day one.
One of the easiest ways to start doing this is by reading useful and relevant resources. Becoming familiar with good commercial information is a great way to begin to understand more about commercial matters. Find resources that speak to you and make things seem simple so if the Financial Times goes way over your head, don’t worry, just find something else that doesn’t even if it’s something as simple as the business pages of the BBC website. What is more important is that you understand the concepts being talked about rather than trying to learn and regurgitate back big chunks of information that, when questioned on, you don’t really understand. Below is a list of some common business resources:
- The Economist profiles industry sectors from time to time. Use their website to find articles on particular sectors.
- The Financial Times https://www.ft.com/ presents a global view of business and markets (selected content only). It also occasionally carries sector-based supplements. Extracts from reports and a list of reports can be found on http://www.ft.com/reports. For example, reports on corporate finance are useful in terms of understanding issues individual clients may be facing.
- CNN US-based news but also covers world affairs and international news: http://www.cnn.com/
- The Guardian offers global and UK specific news: http://www.guardian.co.uk
- South China Morning Post particularly useful for an overview of Asian markets: http://www.scmp.com/portal/site/SCMP
- The Daily Telegraph UK and world news: http://www.telegraph.co.uk/news/
- The Times www.thetimes.co.uk UK and world news, The Times also carries a Law supplement on Thursdays.
- The Wall Street Journal covers detailed banking news and analysis of global markets.
- The business pages of the BBC News website http://www.bbc.co.uk/news/business/ are good for general commercial news updates as well as opinion and discussion on national and international commercial matters
Another way of assessing your levels of commercial awareness is to think about what you already know, through your past experiences. Many law students believe that they have very little evidence of their own commercial awareness until they start to delve deeper into what they have already done.
Consider your employment history and see if you can identify any previous examples of commercial work experience. For example, have you previously worked in a service environment? Did you gain an insight into how the business you were working within was run? Have you ever undertaken a specific project or devised a solution to a business problem? Was there a particular challenge that you had to overcome?
It is not only your employment history that counts as commercial work experience. Positions of responsibility can also demonstrate that you have the necessary skills. Did you belong to any societies at university and what was your role? For example, if you were the treasurer of a sports club then this is an example that can be used to demonstrate your commercial awareness through managing finances and budgets etc.
Not-for-profit work can also be used to demonstrate commercial awareness as, depending on your role, you may have been involved in promoting events or persuading companies to sponsor you or provide free products. These activities help to demonstrate that you are commercially aware by demonstrating an understanding of basic business processes. Working within the family business or setting up and managing your own business (even online) can all demonstrate commercial awareness as there is no better way to understand the fundamentals of a business than by running one.
In addition to looking at what you have done already you may want to increase your levels of awareness by undertaking some useful commercial employment which could be done while you study or after you have finished your degree or LPC. When considering what may be a viable option as commercial work experience it is important to assess yourself first. Consider what area of law you wish to practise, the type of firm and which skills you may be lacking. Next, think about in which other environment you could gain the skills that may be relevant to the firm of your choice. For example, if you are interested in banking or corporate finance then consider gaining work experience in a corporate setting i.e. an accountancy firm or a tax office. Another option is to consider the type of clients you would be dealing with in a corporate law firm and try to gain some experience in a bank or financial institution perhaps. If you can gain an insight into how your potential clients run their business then this will be a strong selling point to bring to a legal interview. Alternatively think about how a corporate law firm itself is run and the types of skills you would need to work there i.e. working on large complex deals as part of a large team. Use this basic idea to think laterally about other organisations which would allow you to work in the same way i.e. insurance companies or finance houses.
Commercial roles can vary greatly depending on what you are interested in. The most important thing to consider is how you can demonstrate relevant transferable skills to your target law firms. The following are some examples:
- Working in a bank (possibly in a customer facing role)
- Working within the Claims Department of an insurance company (legal knowledge may be of use in this role)
- Working at an accountants (tax accountants and tax lawyers perform similar roles)
- Working within a news organisation (not only may you gain first-hand knowledge of business news you may able to develop contacts for future use)
- Working in any business environment (i.e. family business or start your own)
- Undertake paralegal work for a larger corporate/commercial firm (you will gain exposure to the types of deals commercial clients require)
- Work within Local Government or a local authority (they are run as a business)
- Undertake a summer placement or an internship in any of the above contexts (for an insight into how other industries are run).
What ultimately matters though is that you learn and understand about the environments you work in. Even those positions which appear to be at a very low level can produce great commercial insight. It just depends which way you look at it and how well you can explain your understanding to a potential recruiter.