To land a training contract, aspiring lawyers must possess good business knowledge; but what does commercial awareness mean, and how can you develop it?
What is commercial awareness?
Commercial awareness means possessing knowledge of current developments in local, national and world business, particularly any issues that may impact a law firm and its clients.
Why is it important for lawyers?
A lawyer who demonstrates strong commercial awareness is invaluable to their employer and its clients alike.
Law firms expect employees to market their services to prospective clients, not to mention develop trusting relationships with existing ones. Ultimately, law firms are businesses; so lawyers must appreciate the commercial importance of meeting deadlines, keeping costs low and handling information confidentially.
A client, meanwhile, will expect their lawyer to fully understand how their business is run, and which wider social, political and economic issues may affect them. If applicable, lawyers must also appreciate the short, medium and long-term implications of their client's business proposal, and think strategically about the organisation's strengths, weaknesses, opportunities and threats. This enables the lawyer to provide pragmatic, business-minded legal advice to the best of their ability.
How do I develop commercial awareness?
You can improve your commercial awareness skills, understand the mechanics behind a profitable business and stay abreast of issues affecting the legal market by:
- becoming a committee member of a university club or society, in a position where you can help to organise events
- browsing specialist websites such as RollOnFriday, LawCareers.Net, The Firm, The Lawyer, Legal Cheek, Legal Week and Legal Futures
- gaining work experience at a commercial organisation such as a bar, call centre, department store or, if possible, law firm
- going on a gap year, as this will help to develop your budgeting, scheduling and cost-cutting skills, plus gain an international perspective on business issues
- joining industry-specific forums that allow you to attend seminars and network with business professionals
- listening to business-related podcasts or radio shows, such as BBC Radio 4's Today programme
- reading business publications such as the Financial Times and The Economist, and the business pages of a daily newspaper such as The Times
- watching business-related television programmes such as Newsnight, Panorama, Dragons' Den and The Apprentice.
How do law firms test commercial awareness?
Law firms test candidates' commercial awareness throughout the application process.
At the initial application form stage, it's important that you demonstrate basic business acumen. Include a detailed explanation of all commercially relevant work experience and extra-curricular activities you've participated in, speaking confidently about the skills that you've subsequently developed.
In addition, many application forms have entire sections devoted to gauging your interest in and understanding of key commercial issues. You may, for example, be asked to analyse a recent high-profile business deal.
If you secure an interview, you'll be required to demonstrate your knowledge of the business world - meaning that reading all relevant business material and preparing analyses of various economic developments is absolutely vital. You should also complete plenty of research on the commercial activities of the law firm where you're interviewing by trawling through their websites and social media channels.
You may even be asked to prepare a presentation beforehand on the commercial challenges that face a fictional company. During the interview, you'll be tested on the depth of your understanding and analysis, and ability to apply your own commercial experience to the problem.
What commercial skills are law recruiters looking for?
You'll need to show:
- Broad knowledge - You'll be assessed on your ability to independently judge how a particular news item relates to wider political or economic processes, as well as other stories.
- Business acumen - Law firms want to know how applicants would advise clients involved in a current high-profile business event, as well as understand how current affairs may affect the firm.
- Enthusiasm - You should find business and finance interesting, and have the desire to learn more. One way of demonstrating this is to research the commercial side of one of your biggest passions, such as football or fashion.
- Free-thought - Interviewers are impressed by candidates who can confidently present and defend their own views.
- Verbal communication - You must be able to clearly summarise complex business issues that affect the legal industry.
Example interview questions
Three main types of commercial awareness-themed questions are common in interviews.
Firstly, you may be asked to describe and analyse a recent commercial issue. Potential questions include:
- How do you keep abreast of developments in law and business?
- What business deal or story has most interested you recently?
- What commercial challenges does the legal sector currently face?
Secondly, the interviewer may test your knowledge of a business deal that the law firm has recently worked on. This could involve you answering questions such as:
- Did the deal involve a new client or an established long-term client?
- What role did the firm play?
- What were the outcomes, significances and implications of the deal?
Finally, you may be asked a hypothetical question regarding the company. This requires you to advise them on the best possible course of action, and could include:
- How could the firm prepare for an economic downturn?
- Should the firm consider merging with a global firm?
- Should the firm specialise in certain sectors rather than offer a broad service?
For more advice on how to impress, see interview tips.
Find out more
- Explore the 7 skills for a successful law career.