This article is written in collaboration with the Newcastle University Commercial Awareness Society. For more information on the society, you can look here or follow us on Instagram @newcunicas.
Commercial awareness is a common, yet often daunting, buzzword used by those seeking to enter the legal profession. Put simply, it refers to an awareness of events and developments in the business and commercial world. The Association of Graduate Recruiters have recently identified commercial awareness as the number one skill candidates lacked the most, but why is it so important to firms?
It is important to understand that law firms are businesses. Therefore, as with any other business, it is important to know who their clients are, how the firm makes profits and how the firm is impacted by wider factors, including social, political and economic factors. On top of this, it is vital that employees know what is happening commercially in relation to clients; the best way to give advice to clients on how to move forward is to know what is happening with those clients in respect to their business. One example we might look at is the increasing anti-trust action by the EU and US against big tech companies; lawyers advising these companies would have to be aware of developments in this area and advise their client carefully and accordingly.
Ways to Improve Your Commercial Awareness
It is commonly understood that commercial awareness is not something you can achieve the day before an interview but must be achieved over time. Whilst sitting down to read the newspaper each day might appear time-consuming (and, to students, an extra cost), there are a multitude of ways in which you can increase your commercial awareness in tandem with your usual schedule.
Reading the news – reading news articles is arguably the most basic form of increasing your commercial awareness. However, it doesn’t have to come in the format of a broadsheet newspaper – there are many different apps and websites to use. Whilst sources such as BBC News provide a good general overview of day-to-day occurrences, sources such as the Financial Times (which offers a £2.95/week student membership) can provide a more in-depth analysis of developments. Thelawyer.com even allows you to research news stories by firm, which is very useful for applications. Watson’s Daily, however, is arguably one of the best tools to read news stories, condensing articles from a broad variety of sources into a simple, easy-to-read format that can be quickly looked at whilst eating breakfast or on public transport to give you an awareness of the most recent developments for that day.
Podcasts – podcasts are also an amazing way to boost your commercial awareness and can be listened to whilst doing other tasks, making getting your daily dose of business updates much less time-consuming. Spotify has an array of podcasts on offer relating to the news and commercial awareness, including the Watson’s Daily podcast, the BBC Today programme and Financial Times podcast, which each give short, daily instalments.
Social media – one perhaps often-missed yet effective method of increasing your commercial awareness can be through social media; following accounts that provide regular news updates, such as Simple Politics or The Business Update, can allow you to passively make yourself more aware, even in your free time when scrolling through Instagram. Following law firms on social media can also help make you aware of their latest and upcoming projects.
Societies – many universities have law societies and even commercial awareness societies that hold events with the aim of making their members more commercially aware and preparing them on their journey to a career in law. The Newcastle University Commercial Awareness Society set up this academic year has been fortunate enough to welcome guests from a variety of different legal backgrounds to their events and hear what commercial awareness means to them, with more events to come next semester – you can sign up here.
Methods of Analysis: SWOT and PESTLE
Whilst being aware of the day-to-day happenings in the world is one thing, actually analysing those and applying them to a firm or its clients is another. Two popular methods of analysis are the acronyms ‘SWOT’ and ‘PESTLE’, which can be broken down as follows:
Strengths – what are the advantages of a particular group or company? Do they have a unique selling point or advantage compared to others? What unique or low-cost resources can they draw upon that others can’t?
Weaknesses – what are the bad points about the group or company? How could they improve these? What should they avoid? What could cause them to suffer?
Opportunities – what happenings, trends, markets, etc. can the group or company take advantage of? In what ways can they take advantage of these?
Threats – what obstacles do the group or company face? What are competitors doing?
Political – reflecting on how political factors, such as elections, government policies and restrictions may impact a company. A key example here might be Brexit and how this will impact UK businesses or European businesses operating in the UK.
Economic – looks at factors unique to the economy and how they influence a company, such as inflation, interest rates and property prices.
Social – may look at public values and ethics or factors such as population growth, age distribution and changing social behaviours in terms of how they affect a company.
Technological – refers to how technological advancements impact a company. For example, the emergence of mobile internet and smart phones or AI.
Legal – how developments in the law impacts companies. For example, the obligations GDPR places on businesses.
Environmental – considering the environmental impact a company has, whether it is sustainable, etc. Might also look at developments in natural disasters or the weather and how these affect a business. For example, increased global warming has encouraged many companies to reduce their carbon footprint (you might link this to public values under an analysis of social factors).
Key Topics - Brexit and Covid-19
Anyone who regularly watches the news will know that two topics dominate the headlines almost every day at the moment – Brexit and Covid-19. Below, I have broken down some of the things to take into consideration when looking at these two events and how they might relate to law firms.
Brexit
International firms in particular will be keen on knowing the impact on Brexit on both themselves and their clients – will business become more difficult for the firm’s clients? Will the firm need to change the way it works? Researching a firm and their clients will give you an idea of what to look out for in terms of Brexit developments. For example, the current stalemate over a trade deal indicates that the UK could leave the EU without a deal, resulting in taxes being placed on goods travelling between the EU and UK – this might be a big issue for clients who specialise in or rely on the transport of goods.
You might also break down your analysis of this topic into how different sectors as a whole might be affected. For example, looking at banking and finance, we might expect the financial capital of Europe, being London, to change post-Brexit, meaning clients in this sector might want to move elsewhere. Looking to the commercial sector, the current uncertainty in the market as we approach the end of the transition period without a trade deal might appear unattractive to long-term investors, who may feel they cannot rely on the GBP and get a good return on their money. Finally, turning to competition law, as we discussed earlier the EU has anti-competition strategies in place to prevent businesses (such as ‘big tech’ businesses) gaining a monopoly over a given market. If the UK does not follow these strategies post-Brexit, smaller businesses might feel at threat, making the UK an unattractive jurisdiction to operate in.
Covid-19
The impact of the pandemic has had broad impact across almost every sector. As a topic with a vast amount of media coverage, finding examples of how Covid has impacted firms and their clients should not prove difficult.
The emergence of work-from-home culture is one of the major outcomes of the pandemic and is likely to have lasting impact on a number of areas. Whilst at first glance, one might only take into consideration the impact on workers and their employers (for example, whether there has been an increase in productivity or how the mental health of workers has been affected), the impact is in fact much more widespread; for example, the shift to working at home has arguably catalysed the ‘death of the High Street’, with lower footfall in city and town centres and a move to online shopping, as seen with Arcadia’s recent administration. In turn, for some areas the impact has been positive – companies such as Microsoft and Apple have seen an increase in profits this year, with many people spending extra money to furbish their home offices.
Generally, it is important to have an idea of which areas have been hit badly by the pandemic and which ones have prospered, linking these to the firm and its clients – you can read more examples of the impact of remote working here.
Hopefully, this article has provided a foundation on which to develop your commercial awareness and directed you to user-friendly resources to do so. If you are interested in joining the Newcastle University Commercial Awareness Society or would like to hear more about our events, you can join here or follow us on Instagram @newcunicas or on LinkedIn. You can read regular articles on recent news stories and developments under our 'Law in the World' section on the blog.
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