Commercial Awareness – What Is It, Why Does it Matter, and How To Improve?

What is Commercial Awareness? 

There are two kinds of commercial awareness: micro and macro.

Micro commercial awareness centres around understanding how businesses operate and how law firms operate as businesses. This might include learning how profit is calculated, different market strategies a firm might take against its competitors, managing client relationships, or complying with regulations.

Macro, on the other hand, focuses on understanding how wider factors can affect businesses. A useful way of categorising the factors is using the PESTLE framework, which is political, economic, social, technological, legal, and environmental. It is also useful when determining the impact of an event. Macro factors can include a rise in corporate tax, geopolitical conflicts, or new regulations.  

Why Does it Matter? 

In terms of being a commercial lawyer, the advice you give to your clients needs to be well-informed. To be well-informed, you must understand the client’s own business and the commercial landscape they are operating on. Moreover, the advice needs to be risk-proofed, considering its compliance, permanence, and practicality.  

It is also important for applicants as it helps them to participate in informed discussions with interviewers, better prepare for mock presentations and research reports, and better understand the context of the work set. Being commercially aware can therefore help to demonstrate your enthusiasm in relation to the firm’s clients and the work it carries out.  

How to improve? 

Trying to cram commercial awareness right before an interview is just not going to work. By doing this, you are showing a shallow understanding and little interest, which is the polar opposite of what firms look for. 

To slowly build up your commercial awareness, start by reading the news, even just for five minutes when you are on the toilet. There are many sources you can use to build your awareness.

BBC Business News and the Guardian are a good starting point that contain little confusing jargon, which you can simply look up on Google.

When you become more confident, move to the Financial Times or the Economist. While they are useful, they are locked behind a paywall. However, you can access the FT for free through the university.

There is also a free and more accessible version of both, which is the daily podcasts they produce. There is the FT news briefing and the Economist the World in Brief.  

To step up another level, learn about the basic economic concepts that underpin the news. On YouTube for example, there is EconPlusDal.  

So now I hope you have gained deeper knowledge about commercial awareness and are one step closer to becoming an absolute commercial maestro.