Commercial awareness has become almost the holy grail of on the list of potential attributes. It is on nearly all training contract application forms one way or another and, perhaps unsurprisingly, commercial awareness and how to show it is the number 1 question I have been asked by trainees-in-waiting. As such an integral quality for successful candidates, you would expect it to be drilled into to students, like advocacy skills or money laundering. This doesn't appear to be the case: I have not come across a 'commercial awareness' topic on a degree or LPC. Bringing the topic up with the lawyers at my Firm resulted in a lot of waffle and speaking in circles without really defining the issue. Conclusion: no-one reeeally knows what it is......
Put simply 'commercial awareness' is a buzz word (dare I say it, concocted by the marketing department in the sky - also responsible for 'know your client' and ) for a business common sense. In today's legal market, especially with the legal services act on the horizon, lawyers need to do a lot more than just law. Just doing the work is not enough anymore and forms are realising this fairly quickly. Business sense is not traditionally something the legal profession are particularly renowned for and it the more seasoned in the profession can be quite stubborn to coerce into this way of thinking (as an example, our well established private client department have had to employ a customer relations director as some of the more mature fee earners refuse to do any work away from their desks. A client meeting at the client's office - out of the question!). So, firms are making sure the new recruits at least are on board.
A good way to identify what it is all about is to break down how lawyers make money (after all, being commercially aware has to have something to do with money, right?). To make money, the lawyer must have work, he must complete this work in such a way that his fees exceed his costs and he must ensure those fees are paid. Part 2 is about the work and how it is done. Part 3 is credit control, again something fee earners are not that good at - talking about money is almost a taboo amongst many of the legal profession. It may baffle you that lawyers are often reluctant to chase up payment but when you get into practice you will see it all too often. For this reason I am sure the concept of billing and fees will be the subject of a very early training session for new trainees, so I won't cover it here. (Tip - in an interview, if you get the opportunity in business context, mentioning that it is important for lawyers to get their fees paid may get you extra brownie points. It won't get you the job but if you are doing everything else right it could shift the balance in your favour). Step 1 is what we are talking about.
This may be a surprise to some lawyers but the work doesn't arrive on its own. It won't magically appear in your Head of Department's hands, complete with it's own file and briefing note. You don't keep clients just because they gave you work once and multimillion pound instructions don't walk through the front door and plonk themselves on your desk. Trainees-in-waiting take note - understanding where the work comes from is what commercial awareness is all about.
Work is generated from two streams: existing and new clients. These work streams are different and effective management of both is required to maintain sufficient work flow. Existing clients need good service - after all, if your lawyer isn't giving you what you want, you will go somewhere else. Equally, if a firm you have tried once really impressed you, you are going to keep giving them work. The client relationship is paramount. This may seem simple but as Mr Bizzle has experienced it doesn't always translate into practice.
This is only half the battle. A great client care system will retain clients once you have worked for them but if potential clients don't know you exist it doesn't mean much.
A law firm needs to have a presence in the market, its lawyers need to network, tender and generally schmooze it's way into instructions. Essentially it needs to have a good marketing strategy. Often law firms will have a marketing department that governs this but lawyers need to know how to promote themselves and their firms so that opportunities aren't missed. It is often described as 'winning' new instructions. This is a good way of looking at it - it is a competition and should be approached in that way. What can you do to beat everyone else to the finish?
Identifying (and grasping!) opportunities is also important. As an example (and totttalllyyy blowing my own trumpet here) after a chat with a fellow trainee who comes from a family of GPs, I realised there was a gap in the legal market in the South West following the NHS reforms. I did a bit of research and presented the idea to a partner who agreed. This was taken to the next step and now there is going to be a marketing drive at NHS bodies. Yay for me! (I can't take all the glory; our projects team had already got a couple of instructions, they just hadn't thought to involve other departments. Cross selling in my Firm is notoriously terrible.)
Keeping abreast of developments is a big component of getting new work. If a law firm can get a reputation in an area before anyone else they are more likely to be the go-to-firm for that type of work. This requires an eagle eye on the market and an understanding of how you fit into it. BINGO! Commercial awareness!
Now you know what it is, you just have to be able to show it. Not as difficult as it sounds. Think about what you do every day and you will already be using these skills. Bar staff: your bar will run special deals or themed nights to draw in the punters = knowledge of the market. Society committee members: you run the society to deliver what your members want = client care. Even doing the research for an assignment means you are keeping up with legal developments. It really isn't as elusive as it seems.
So, trainees-in-waiting, I have demisted the windows for you; commercial awareness isn't so much of a mystery. It isn't even that hard when you think about it. Maybe the seeming ignorance of the subject was really a front for keeping you in the dark to test how savvy you all are. Well, I have just given you some of the answers.... I look forward to seeing what the next buzz word attribute they throw your way!!!