By Cem Rifat, University of Bristol, Alumnus of The Young Lawyer Programme
Commercial awareness is an abstract, but inescapable, term that any student interested in a career in commercial law - or any career in the City - would have come across. It is often cited as the key attribute of a successful commercial lawyer and the ability to demonstrate it in an application sets students in good stead for careers at the most prestigious firms. But, what exactly does commercial awareness mean, and how can it be demonstrated?
Defining commercial awareness
Commercial awareness is, at its most basic level, the ability to understand a client’s business and the conditions in which it operates. This relates both to microeconomic issues, the position of the individual business and its needs, and to macroeconomic issues, the position of the economy and policy of the government. It is the ability to appreciate these factors which enables a commercial lawyer to tailor the provision of legal advice and account for the multifaceted nature of the business world.
(i) External aspect
This refers to the appreciation of any external factors which can affect a client’s decision making. Taking into account the economic and political climate surrounding a client’s business enables commercial lawyers to provide comprehensive legal advice. Indeed, such advice will aid a client in navigating its business through current and future market conditions. The implications of topical events, most significantly Brexit at the moment, will be at the forefront of this process. Commercial lawyers will be proactive in updating a client on how their business may be affected and will advise them on any steps they should take to protect themselves.
(ii) Internal aspect
This refers more specifically to understanding the nature of a client’s business, the industry in which it operates and the market in which it competes. This, coupled with an awareness of what a client aims to achieve in the short and long run, makes for specific and high-quality legal advice.
Demonstrating commercial awareness
Though it is all well and good knowing what commercial awareness means, the real difficulty lies in demonstrating an aptitude for it when applying for work experience and, eventually, a training contract or pupillage.
(i) External demonstration
This refers to developing external knowledge about the current economic and political climate. Business-orientated news sources are particularly useful, most notably the Financial Times or The Economist. However, mere knowledge may not suffice. Commercial lawyers must appreciate the implications of current affairs and how they may affect a client. There are many online resources dedicated to commercial awareness which provoke discussion about current issues and help with understanding their application in practice. For example, Bright Network members receive a weekly commercial awareness update which analyse the events of the past week.
(ii) Internal demonstration
This refers to the logical thinking which enables a commercial lawyer to find practical solutions for a client. Efficient cognitive processes may be demonstrated by performance in critical or verbal reasoning tests, but can also be manifested in interviews by taking a cogent approach to a case study.