Is it commercial awareness month at the moment? If it is, nobody thought to tell me.
I think it must be, as there have been a flurry of articles published in the last few weeks which have piled in on the increasingly tired topic of commercial awareness. You know, it’s that precious skill which all commercial lawyers must demonstrate to be able to justify their existence and the thing which all law students want a transplant of to kick start their careers.
These articles of which I speak were dedicated in the most part to musing over what commercial awareness might or might not be. One article in particular, which was in the most recent ‘Junior Lawyers’ e-magazine, (yes, I still have a butchers at it from time to time – someone has to) questioned whether this mystical commercial awareness business should be taught as a separate skill on the LPC.
Since ‘commercial awareness’ become such a buzzword for current and would-be lawyers, there’s been an awful lot written about what it actually is. Strangely, few seem to be able to pin its meaning down with any degree of precision. That still surprises me.
For me, commercial awareness isn’t really that tough a concept to grasp. What I think it boils down to is this.
It’s essentially the ability of a lawyer to use common sense and a bit of perspective and to tailor legal advice in a way which takes into account the commercial context in which the client operates (or will operate) when he or she is dishing out legal advice. Put another way, it’s the context-sensitive application of relevant commercial issues that a lawyer should exercise when advising a client. Having sufficient knowledge of those issues and deciding which are and which aren’t relevant is the tricky bit.
Commercial awareness isn’t a one-size-fits-all concept. I’ve seen some rather misguided careers advice which more or less suggested that reading the Financial Times was a sure-fire way to obtain the requisite level of commercial awareness needed for a career as a solicitor. That’s not just ridiculously silly – it’s plain wrong.
If a small start-up business came to a lawyer for advice on a commercial lease, for instance, it’s not going to matter a whole lot to the client whether the solicitor in question has a firm grasp of what the FTSE 500 is doing at the moment. But their being au fait with the current and likely trends of the local leasehold property market might be very relevant.
Commercial awareness has been talked-up and over-complicated over the last few years to the point where its true meaning has largely been lost. Depending on the circumstances, any number of factors could combine to make up commercial awareness, but that doesn’t mean that it, as a concept, is inherently difficult to grasp. Those factors might vary from things like a client’s financial position, to the common trends in the commercial sector they’re operating in, to how much time, money and other resources they can devote to the issue in question. But most of these issues are ones which are inherently part and parcel of giving legal advice in a commercial context. A lawyer would still need to take them into account to give good quality legal advice across a broad range of practice areas, even if the term ‘commercial awareness’ had never been coined.
I think virtually every solicitor practising in an area which has some commercial connection already has ‘commercial awareness’ and that they are adept at applying that knowledge as a routine part of giving legal advice. If they didn’t have a decent dollop of commercial awareness, they wouldn’t be in the job very long. In other words, it goes with the territory of being a solicitor and everyone (current and prospective lawyers included) should probably ignore this silly commercial awareness label and simply concern themselves with giving good quality legal advice.
Any solicitor worth their salt should have a healthy desire to develop and maintain a working knowledge of the various non-legal factors which might shape or feed into good quality legal advice in their practice area – such as recent developments in the relevant sector. This might be very general, such as the ease with which small businesses are obtaining credit or how much luck start-ups are having attracting private equity finance. Knowing your clients, their problems (current and potential) and helping them manage those problems is at the heart of being ‘commercially aware’.
In a sense, then, commercial awareness is about thinking laterally – or rather, usefully applying lateral knowledge when preparing legal advice. Because of that, developing commercial awareness comes naturally as part of practising law in a commercial area. It doesn’t need to be taught as a separate skill on the LPC – it’s far too inherent and pervasive in the relevant black letter law and in the skill of interviewing and advising clients to be separated out.
To students who are concerned about developing commercial awareness, I’d say you really shouldn’t worry. Thinking practically about factors likely to affect your (hypothetical) clients and tailoring your advice to suit will necessarily mean you’re commercially aware. And while it’s something that will develop with experience, having a sensible head on your shoulders from day one is half the battle won. I guess what I’m saying is that demonstrating commercial awareness as a student is perfectly possible. Being able to point to a previous job, which could be anything from investment banking to having a paper round, will go a long way towards demonstrating commercial awareness if you can show you had an appreciation of the commercial pressures your employer was under. At its crudest, that might be as simple as showing an acknowledgement that money doesn’t grow on trees.
Everything is relative. But the chances are, you’re more commercially aware than you thought.
So let’s stop worrying about what is little more than a silly label.