‘Commercial awareness’ is a ubiquitous buzzword when it comes to applications for vacation schemes and training contracts. This blog post will explore what commercial awareness is and why it is necessary, as well as provide some tips for improving commercial awareness (including those from one of LfA’s Commercial Awareness Officers) and links to resources. It will focus especially on commercial awareness in relation to four of our sponsors – Jones Day, DLA Piper, Allen & Overy and Herbert Smith Freehills.
What is commercial awareness?
Broadly speaking, commercial awareness requires being conscious of developments in the business world. From a law firm perspective, commercial awareness encompasses two elements: (1) understanding the law firm as a business, and (2) understanding clients’ businesses.
Why do law firm applicants need to be commercially aware?
Commercial awareness is often tested by law firms during the application process, such as through the application form and training contract interview. It is thus crucial for applicants to be commercially aware (e.g. by being up to date with recent developments) and to be able to effectively convey this information.
But why do firms want applicants to display good commercial awareness skills? Exhibiting impressive commercial awareness skills demonstrates to a law firm that a candidate has a genuine interest and passion for the job as well as the industries with which they will be working in. For example, a graduate recruiter at Herbert Smith Freehills would ‘expect’ applicants to be able to explain why working on cases, especially their most high profile ones, would appeal to them.
But commercial awareness is not a skill that ends with obtaining a training contract; instead, it reflects an expectation of a legal practice – for a lawyer to provide legal advice to a client by analysing and evaluating the wider context. The law does not operate in a vacuum, and having commercial knowledge helps lawyers to see the world in which their clients navigate, thus enabling them to advise their clients more effectively. This is critical in the competitive legal market. Law firms actively encourage their lawyers to keep up their commercial awareness skills; for example, Allen & Overy offers a bespoke global development programme that covers areas such as commercial awareness.
Commercial awareness tips
As stressed by multiple online legal resources, commercial awareness skills do not develop overnight. There are broadly two areas in which you – as a potential law firm applicant – can improve your commercial awareness: undertaking research and undertaking practical tasks.
There are countless resources on the internet that can boost your commercial awareness: websites of law firms (such as our sponsors), news platforms (e.g. The Financial Times and The Economist), and special resources aimed at aspiring lawyers (e.g. LawCareers.Net). These resources may take the form of blogs, articles, podcasts, news stories and/or videos. By concentrating on resources that maintain your engagement, you can develop a routine of following business and legal news on your chosen platform(s). Consequently, this will help you identify trends and patterns, enabling you to analyse business stories and understand how the business world is developing. Exploring the news pages of law firms that you are applying to can be a good starting point to find out about cases and deals that the law firm has recently worked on.
Vanessa Tsao, one of LfA’s Commercial Awareness Officers, uses a selection of media to hone her commercial awareness skills. Her go-to podcast is Commercial Awareness with Watson’s Daily business and financial news (available on Spotify as well as other platforms). She also enjoys subscribing to business newsletters such as Charter, Finimize and Bloomberg Green.
Moreover, Vanessa suggests picking a couple of topics or sectors that you are most interested in, as this will enable you to keep tabs on them. Specialised resources can be used to research these topics. For example, DLA Piper’s blogs are split into different sectors and countries, from The Labor Dish (that focuses on employment and labour issues that are important to US employers) to Technology’s Legal Edge (that provides articles on cutting-edge legal issues regarding various emerging technologies). The Student Lawyer suggests that the ‘best way’ to impress professionals in an interview is to have at least one well-rehearsed example to prove your commercial awareness; you should be able to show that you understand a deal and can analyse it. These specialised, focused resources may help with such analytical skills.
Undertaking (legal and/or non-legal) work experience and utilising your pre-existing commercial experience are examples of more hands-on ways of boosting your commercial awareness skills. If you have worked for a business part-time, you are likely to have (subconsciously) obtained an understanding of how it is run. Legal work experience can be obtained from the comfort of your home; for example, Herbert Smith Freehills offers a Virtual Experience Program. Various tasks, such as assisting in-house counsel in preparation for a board meeting, are designed in part to boost participants’ commercial awareness.
Using your networking skills and contacts can provide concentrated advice and resources to develop your commercial awareness. Talking to trainees at law firm events (such as those hosted by LfA) can enable you to find out what resources these successful applicants found useful, and how they then applied that knowledge during the application process for a particular law firm. Moreover, by talking to graduate recruitment, you can obtain a better insight into how commercial awareness will be assessed at the firm.
Please consider subscribing to LfA’s newsletter, which provides frequent commercial awareness updates. Additionally, here are some links to various resources that are published by our sponsors: