If you’re so commercial, start a law firm

Apparently, commercial law firms want their junior lawyers to demonstrate ‘commercial awareness’. IP Draughts has seen several articles and social media discussions on this subject recently. But commercial awareness can mean many different things, as was discussed in a Guardian article.

It could mean understanding the overall objectives and priorities of a firm’s commercial clients. IP Draughts has always found slightly fatuous the advice given to law students to read the Financial Times to gain these insights. But perhaps his commerciality runs on different lines.

It could mean understanding the people who work for the firm’s clients, what motivates them, and what they want from their lawyers.  This could vary enormously between types of client and job roles within a client organisation, as well as individual personalities. The entrepreneur who starts a high-tech business may have very different expectations and priorities from a professor, IT salesman, finance director or middle manager in a multi-national insurance company.

In IP Draughts’ view, it takes years to develop an understanding of different types of clients and what they want (and, as important, what advice they should get). Some clients are very demanding, and this may be down more to culture and personality than to business logic. It is unfair to expect very junior lawyers to have these insights. They need guidance from senior colleagues. Some firms are better than others at providing this guidance.

At another level, commercial awareness is recognising that legal advice is not an end in itself but is a service that helps a commercial client to assess risk and take business decisions. Bearing this in mind when giving legal advice may help the lawyer to make the advice more useful. But a balance needs to be struck: if you are the business of providing high-end, reliable, ethical legal advice, it may be sometimes necessary to deliver a message that the client doesn’t want to hear.

Yet another version of commercial awareness is understanding the priorities of the law firm. Some junior lawyers are naive about the purpose of a law firm. It is to make profits for the partners. Its business model for doing this may be to provide an excellent service to clients, to be ethical and look after the client’s interests, to recruit excellent people, and give them an excellent working environment. Or not. Understanding how your law firm operates is important for any ambitious lawyer.

IP Draughts is sceptical about commercial awareness. He understands that the training one receives in law school is mostly theoretical, and that junior lawyers need to adjust their approach when starting in practice, to focus more on the client. But he also doubts whether many commercial lawyers have more than a superficial understanding of business, particularly in large law firms.

If you think you are really commercially aware, why haven’t you started your own law firm? It’s not that difficult. The business model can be as simple as you want it to be. The administrative costs are low, even in the current era of SRA over-regulation. You just have to get a steady stream of clients to instruct you.

And that is the heart of being a successful commercial lawyer. Persuading clients to instruct you and keep instructing you. Having the skills, personality and experience to provide a good service. In IP Draughts’ view, this package of attributes is learnt over time, and is based on solid foundations: technical legal skills and an engaging personality. Being asked to demonstrate commercial awareness when applying for a training contract is a ritualistic dance that has no meaning. The emperor has no clothes.

1 Comment

Filed under Legal practice

One response to “If you’re so commercial, start a law firm

  1. Carol David Daniel

    Spot on, also seems to be true for a lot of other graduate jobs

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