🤔 What is commercial awareness?

What does ‘commercial awareness’ mean?

At its essence, commercial awareness is an understanding of:

• 🏢 how businesses work (things like different business sectors and business models), and

• 🌍️ what’s going on in the wider world (things like the economy and the current political and regulatory landscape).

Why is it so important?

⚖️ To break into a legal career: It’s not a secret that most law firms test commercial awareness when they’re assessing candidates — commercial awareness is often the main skill that applicants lack.

Law firms can test applicants on commercial awareness in the written application form or at an assessment centre.

So, developing your commercial awareness improves your chances of breaking into the legal career.

💼 To become a better lawyer: As a commercial lawyer, it’s important to be commercially aware so you can advise your client better.

For example, if you’re client is in the advertising industry and you’ve read up about a new law being proposed that puts obligations on advertisers, you can either:

• let your client know about this ahead of time (which they’ll appreciate), or

• make sure any future advice you them reflects the new law.

Another example of how lawyers use commercial awareness is in being aware of what things are considered ‘market’ in transactions.

The term ‘market’ is used to mean ‘market standard’ — if you keep up with what’s market standard in transactions, you can make sure that your client gets a deal that reflects the normal position in that industry.

Things like this aren’t law - they can’t teach you this at university - but they’re so important to being a good lawyer.

And they’re constantly changing, so it’s important you are constantly developing your commercial awareness.

How do I develop my commercial awareness?

📰 Read the news: A good starting point is to read some business news regularly.

Sign up for LittleLaw to stay in the loop with the news you need to know as an aspiring commercial lawyer — that makes it easy because it’ll come straight into your inbox.

Other good sources for business news are:

• City A.M.

• BBC Business

• Lexology

• Mondaq

Another thing you can do is to look at law firms’ news or insights pages.

For example, Pinsent Masons has a news service called Out-Law which has articles on changes to the law, along with useful commentary from the firm’s lawyers.

A lot of other law firms also do similar things so, if you’re applying to a specific firm, see if you can read the news they publish.

🧠 Think about businesses: Next time you interact with a company, think about how they operate.

You can ask yourself questions like:

• How do they make money?

• What are their main costs?

• What’s their unique offering?

• What sorts of laws or regulations do they have to keep up with?

• Who are the main competitors?

Now, you might not know all the answers but you’ll be able to find them with a bit of Googling.

And over time, there will be less Googling needed because you’ll become more familiar with different businesses and the challenges they face.

Final word

Becoming commercially aware isn’t something that can be achieved quickly — it needs persistence.

But it’s definitely worth spending the time on.

Good commercial awareness will give you the best chance when it comes to applications. You’ll also be able to impress your clients throughout your legal career.

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