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Commercial awareness is talked about everywhere in connection with training contract applications and is vitally important. However it’s meaning is not understood by many applicants which is a concern given that many law firms will often cite a lack of commercial awareness as the reason for rejecting otherwise strong candidates.
You won’t find one set definition of commercial awareness but broadly it can be taken to mean the following:
- Understanding how businesses and the business world operate – you need to show an interest in, and enthusiasm about, business
- Understanding the effect on solicitors’ clients of things happening in the business, regulatory and economic worlds
- Understanding that legal solutions should not be provided in a vacuum – solicitors must take into account commercial considerations of the client too and give their legal advice in the context of the client’s business
- Having an inquisitive nature when it comes to business, markets and the commercial aspect of organisations and projects
- A general understanding of some of the different types of commercial and corporate transactions that firms might work on
- Understanding the business of a law firm, their clients and the environment in which they operate and the role of commercial lawyers
- Understanding how law firms themselves operate as businesses – how do they make their money, what are the important commercial factors that contribute to their success or failure
Here is a selection of resources to read to give you a better understanding about commercial awareness and why it is important:
Article: “Firms ask for ‘commercial awareness’ – but what do they mean?” – Penny Cooper & Elizabeth Cruikshank – http://goo.gl/OH4p8
Article: “Testing your commercial awareness” – Penny Cooper & Elizabeth Cruikshank – http://goo.gl/IX4Re
Article: “Commercial Awareness” by Ashley Connick on All About Careers – http://goo.gl/NDym9
Article: “Commercial Awareness: Understand it, develop it & use it to your advantage” on All About Careers – http://goo.gl/PbwkZ
All About Law Articles: A Set of 4 articles discussing Commercial Awareness: http://goo.gl/ORMsi
Article: from a partner at Withers about what its like to be a commercial solicitor: http://goo.gl/DauPz
Article: trainees advice on how to respond to commercial awareness questions: http://goo.gl/X6VlB
Book: All You Need to Know About Commercial Awareness by Chris Stoakes – see here: http://goo.gl/KPXgq
You will also become much more commercially aware through your research into law firms, their practice areas, their clients and the deals and cases they have been involved in. Do not underestimate the importance of extensive research around these areas.
As you research firms graduate recruitment materials you will also be able to pick up clues on how they expect you to demonstrate commercial awareness to them.
You should certainly download and watch the following video from Addleshaw Goddard as their graduate recruitment team answer the question “How can candidates best demonstrate commercial awareness in an interview?”:
Download it here: http://goo.gl/mBFij
To improve your commercial and business knowledge generally you must regularly read the financial press and keep abreast of the main commercial and corporate news stories. Reading the Financial Times and/or the financial sections of the Sunday papers will help with this. However, its hard to improve your commercial awareness over night and fake it to law firms so this must be done consistently over a period of time.
Of course you can read up on current affairs when the time comes for interview but generally the firms will be expecting you to have some commercial awareness because you have a genuine interest in business and therefore have built up some knowledge already over time.