This information was collated from our webinar covering all things qualifying work experience (QWE). A big thank you to our contributors Ruth Ekong (Solicitor and SQE2 student at the College), Idin Sabahipour (Solicitor and Founder of Little Law and Sarah Taylor (Solicitor and Programme Leader at The College of Legal Practice).
An often elusive phrase, ‘commercial awareness’ is banded about frequently in application forms, firms and interviews. It’s easy to end up a little unsure about what this phrase means in practice, and how to upskill in this area. Don’t worry, we’ve put together a 101 for you!
What is commercial law?
Commercial law is all about making law accessible to clients. As Idin Sabahipour of Little Law puts it, ‘you won’t go delving into black letter law with your clients straight away. You’ll adjust and edit the necessary legal information, and make it accessible to their business needs’. Working commercially is all about exploring law with your clients with a business hat on, ensuring you consistently meet their needs, experience and understanding while delivering the necessary advice. As Idin goes on, ‘your clients want an answer to their business problem, so they want a business answer, not a legal answer’. Commerical awareness is about understanding this and altering your communication for each client.
How does this look in practice? It’s about making your law contextual. A small, family-run baking business, for example, might have a very different approach to their work, as well as different interactions with the law, to a global firm in finance. The skill of commercial awareness is having a deep understanding of your client’s motivation, needs, risk awareness and business structure, and delivering relevant information to suit them. Another way to explore this is by considering your own motivations when making any kind of transaction or big life decision - for example, buying a car. What are your motivations in buying a car? What is your budget? What do you need it for? Is this your first car, or are you a highly experienced driver? All this will affect your purchasing behaviours. Similarly, the characteristics of a business or firm will affect how best you can suit their needs.
Improving your commercial awareness: the 3 L’s
Now we’ve grasped a better understanding of what commercial awareness is, let’s explore how you can better your understanding and experience of using it. This is highly useful for interviews, as well as when you secure your own work experience and future roles. Idin has a great mnemonic of ‘The Three L’s’ to help you grasp commercial awareness in relation to real-life scenarios: Looking Out, Looking In, and Law Firm Involvement. In this example, Idin takes a recent transaction that made the news - The Restaurant Group (TRG) selling two of their restaurant chains (Frankie and Benny’s and Chiquitos) to their rival, Big Table.
Looking Out
Firstly, looking out. What are the wider factors of this transaction happening? What lead to this? Here, ‘out’ factors for this change in performance could be the cost of living, rising interest rates, and overall trends in customer preferences.
Looking In
Next, looking in. What internal business factors are motivating this decision? Here you need to step into the shoes of the company and consider, from their perspective, why they are planning a change. Learn the ins and outs of the business - what drives them? Are they risk averse, risk-taking? These are all things you need to consider.
In this example, TRG owns multiple chains. Frankie and Benny’s and Chiquito’s were significantly underperforming, but their other chain, Wagamama’s, was doing very well. TRG want to maximise profits by selling off underperforming restaurants and planting the sale money into their higher-performing chain.
Law firm involvement
Finally, the connection between looking in and out is law firm involvement. Once you know the internal and external factors leading to a transaction, ask yourself: why would a law firm get involved here? What teams within a firm would be involved, and what aspects of law would be needed to support the transaction?
Final thoughts and further resources
If you’re looking to do more research into your own commercial awareness, a solid place to start is the webinar that inspired this piece. Watch here. A few other great resources include Idin’s website Little Law, which breaks down current events and their relation to law. Law Careers also offers a highly comprehensive list of podcasts, radio shows, television and further online resources that will support your commercial awareness.
We hope this 101 helps you contextualise the meaning behind commercial awareness and prepares you for using this skill in interview, application, and work experience placements. Good luck!
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