What Commercial Awareness Really Means For Lawyers
Published:
January 17, 2024
Last updated:
February 12, 2024
We have more than 25 years of experience in corporate law, business and finance.
We’ve worked at leading law firms advising the world’s biggest banks and global corporations on complex legal issues and, in our business lives, we’ve instructed law firms as paying clients.
One of the most important skills for the modern lawyer is commercial awareness.
It’s this skill that separates the good lawyers from the great lawyers.
It’s this skill that will get you promoted at your law firm.
It’s this skill that will mean that the best clients will instruct you on the best matters.
This guide breaks down commercial awareness for lawyers. We’ll look at:
We hope you find it useful.
We have more than 25 years of experience in corporate law, business and finance.
We’ve worked at leading law firms advising the world’s biggest banks and global corporations on complex legal issues and, in our business lives, we’ve instructed law firms as paying clients.
One of the most important skills for the modern lawyer is commercial awareness.
It’s this skill that separates the good lawyers from the great lawyers.
It’s this skill that will get you promoted at your law firm.
It’s this skill that will mean that the best clients will instruct you on the best matters.
This guide breaks down commercial awareness for lawyers. We’ll look at:
We hope you find it useful.
Get the free email that keeps UK lawyers ahead on the stories that matter.
We send a short summary of the biggest legal industry and business stories you need to know about three times a week. Free to join. Unsubscribe at any time.
The best lawyers are not those who are the best at law. Or to put it another way, having the best understanding of the law does not make you the best lawyer.
This may surprise some people. But it makes sense when you think about it. Lawyers don’t work in isolation, they work for clients.
And because lawyers work for clients, the best lawyers need more than just the best understanding of the law.
The best lawyers operate at the intersection of three essential skills. You can see what that looks like in the diagram above.
Law Firm | Trainee First Year | Trainee Second Year | Newly Qualified (NQ) |
|---|---|---|---|
| Addleshaw Goddard | £52,000 | £56,000 | £95,000 |
| Akin Gump | £57,500 | £62,500 | £169,235 |
| A&O Shearman | £50,000 | £55,000 | £125,000 |
| Ashurst | £52,000 | £57,000 | £115,000 |
| Baker McKenzie | £50,000 | £55,000 | £118,000 |
| Bird & Bird | £47,000 | £52,000 | £95,000 |
| Bristows | £46,000 | £50,000 | £88,000 |
| Bryan Cave Leighton Paisner | £50,000 | £55,000 | £105,000 |
| Burges Salmon | £45,000 | £47,000 | £68,000 |
| Charles Russell Speechlys | £47,000 | £50,000 | £85,000 |
| Cleary Gottlieb Steen & Hamilton | £57,500 | £62,500 | £160,000 |
| Clifford Chance | £50,000 | £55,000 | £125,000 |
| Clyde & Co | £42,000 | £44,500 | £80,000 |
| CMS | £50,000 | £55,000 | £105,000 |
| Cooley | £52,000 | £57,000 | £150,000 |
| Davis Polk & Wardwell | £60,000 | £65,000 | £165,000 |
| Debevoise & Plimpton | £55,000 | £60,000 | £160,500 |
| Dechert | £50,000 | £55,000 | £145,000 |
| Dentons | £48,000 | £52,000 | £92,000 |
| DLA Piper | £50,000 | £55,000 | £100,000 |
| Eversheds Sutherland | £44,000 | £48,000 | £95,000 |
| Farrer & Co | £45,000 | £48,000 | £83,000 |
| Fieldfisher | £46,000 | £49,500 | £95,000 |
| Freshfields Bruckhaus Deringer | £56,000 | £61,000 | £150,000 |
| Fried Frank | £55,000 | £60,000 | £175,000 |
| Gateley | £36,000 | £38,500 | £75,000 |
| Gibson Dunn | £60,000 | £65,000 | £180,000 |
| Goodwin Procter | £52,000 | £57,000 | £160,000 |
| Gowling WLG | £47,000 | £52,000 | £92,000 |
| Herbert Smith Freehills | £50,000 | £55,000 | £120,000 |
| HFW | £46,000 | £50,000 | £95,000 |
| Hill Dickinson | £39,000 | £41,000 | £72,000 |
| Hogan Lovells | £50,000 | £55,000 | £120,000 |
| Irwin Mitchell | £40,000 | £42,000 | £75,000 |
| Jones Day | £54,000 | £63,000 | £145,000 |
| K&L Gates | £50,000 | £55,000 | £110,000 |
| Kennedys | £41,000 | £44,000 | £80,000 |
| King & Spalding | £50,000 | £55,000 | £156,000 |
| Kirkland & Ellis | £60,000 | £65,000 | £169,235 |
| Latham & Watkins | £50,000 | £55,000 | £169,235 |
| Linklaters | £50,000 | £55,000 | £125,000 |
| Macfarlanes | £50,000 | £55,000 | £115,000 |
| Mayer Brown | £50,000 | £55,000 | £120,000 |
| Milbank | £57,500 | £62,500 | £174,418 |
| Mills & Reeve | £30,000 | £32,000 | £58,000 |
| Mischon de Reya | £45,000 | £50,000 | £90,000 |
| Norton Rose Fulbright | £42,500 | £53,000 | £120,000 |
| Orrick | £55,000 | £60,000 | £140,000 |
| Osborne Clarke | £53,000 | £55,000 | £91,500 |
| Paul Hastings | £55,000 | £60,000 | £173,000 |
| Penningtons Manches Cooper | £45,000 | £47,000 | £75,000 |
| Pinsent Masons | £47,000 | £51,500 | £92,000 |
| Reed Smith | £50,000 | £55,000 | £107,500 |
| Ropes & Gray | £60,000 | £65,000 | £165,000 |
| RPC | £44,000 | £48,000 | £85,000 |
| Shearman & Sterling | £55,000 | £60,000 | £145,000 |
| Shoosmiths | £43,000 | £45,000 | £90,000 |
| Sidley Austin | £55,000 | £60,000 | £166,500 |
| Simmons & Simmons | £52,000 | £57,000 | £107,500 |
| Skadden | £58,000 | £63,000 | £165,000 |
| Slaughter and May | £50,000 | £55,000 | £125,000 |
| Squire Patton Boggs | £33,000 | £50,000 | £100,000 |
| Stephenson Harwood | £46,000 | £51,000 | £95,000 |
| Sullivan & Cromwell | £60,000 | £65,000 | £145,000 |
| Taylor Wessing | £50,000 | £55,000 | £100,000 |
| TLT | £42,500 | £45,500 | £75,000 |
| Travers Smith | £50,000 | £55,000 | £110,000 |
| Trowers & Hamlins | £45,000 | £49,000 | £80,000 |
| Vinson & Elkins | £60,000 | £65,000 | £173,822 |
| Watson Farley & Williams | £48,500 | £52,000 | £95,000 |
| Weightmans | £32,000 | £34,000 | £60,000 |
| Weil Gotshal & Manges | £60,000 | £65,000 | £170,000 |
| White & Case | £56,000 | £61,000 | £150,000 |
| Willkie Farr & Gallagher | £55,000 | £60,000 | £150,000 |
| Withers | £45,000 | £49,000 | £90,000 |
| Womble Bond Dickinson | £42,000 | £44,000 | £78,000 |
Rank | Law Firm | Revenue | Profit per Equity Partner (PEP) |
|---|---|---|---|
| 1 | DLA Piper* | £2,833,000,000 | £2,140,000 |
| 2 | Hogan Lovells* | £2,158,000,000 | £2,204,000 |
| 3 | Allen & Overy | £2,100,000,000 | £1,820,000 |
| 4 | Clifford Chance | £2,060,000,000 | £2,000,000 |
| 5 | Linklaters | £1,900,000,000 | £1,779,000 |
| 6 | Freshfields Bruckhaus Deringer | £1,840,000,000 | £2,090,000 |
| 7 | Norton Rose Fulbright* | £1,640,000,000 | £820,000 |
| 8 | CMS** | £1,591,000,000 | Not disclosed |
| 9 | Herbert Smith Freehills | £1,186,000,000 | £1,173,000 |
| 10 | Ashurst | £879,000,000 | £1,170,000 |
| 11 | Clyde & Co | £788,600,000 | £708,000 |
| 12 | Eversheds Sutherland | £730,900,000 | £1,290,000 |
| 13 | Bryan Cave Leighton Paisner* | £664,000,000 | £740,000 |
| 14 | Pinsent Masons | £605,900,000 | £797,000 |
| 15 | Slaughter and May*** | £572,000,000 | Not disclosed |
| 16 | Simmons & Simmons | £521,000,000 | £1,002,000 |
| 17 | Bird & Bird** | £495,000,000 | £669,000 |
| 18 | DWF | £451,600,000 | Not disclosed |
| 19 | Addleshaw Goddard | £443,000,000 | Not disclosed |
| 20 | Taylor Wessing | £439,000,000 | £809,000*** |
| 21 | Womble Bond Dickinson* | £417,000,000 | £550,000 |
| 22 | Osborne Clarke** | £377,000,000 | £687,000 |
| 23 | Fieldfisher | £370,000,000 | £930,000 |
| 24 | Kennedys | £313,000,000 | Not disclosed |
| 25 | Macfarlanes | £296,600,000 | £2,100,000 |
The million-dollar question. What exactly is commercial awareness?
You’ll be pleased to know that there’s no magic here. It’s quite simple.
You should think of commercial awareness consisting of three things:
You understand how companies operate and how they are organised. You are familiar with fundamental business, finance and economic concepts.
You know what’s going on in the world of business. You know the big business stories currently making the headlines. You know which industries are doing well and which ones are doing badly.
You understand that law firms are businesses. You understand how they operate and how they try to deliver legal services better than competitors.
You know the trends affecting the legal profession and how they will impact the advice given to clients.
If you can check off these three things, you can regard yourself as ‘commercially aware’.
That’s great, but…
It doesn’t (yet) give you the right to call yourself a commercially aware lawyer.
For that, you need to apply your commercial awareness to the work you do and the legal advice you give. There are some examples below.
So we now know what it means to be commercially aware, but why does any of that matter?
Here are three reasons why the best lawyers are commercially aware:
Clients do not instruct lawyers for legal advice. They instruct lawyers to solve a problem for them.
The legal advice you give will be better if you understand the ‘why’ behind the problems you are solving for your clients.
When you have an understanding of why your client is coming to you for advice, why they are doing the thing they are doing, you will be able to see the context of your legal advice.
Your advice will be better. It will be tailored to the business problem your client needs solving. Your client will thank you because they will see you like a consultant who also gives legal advice.
Lawyers are nothing without their clients. Think about it.
When you understand the business challenges facing your client, you will build more meaningful relationships with them.
Over time, clients will come to you - specifically - for advice. They will give you the best work.
When you understand that law firms are also businesses, you will understand that law firms want commercially aware lawyers in senior, decision-making positions.
In other words, they want commercially savvy partners.
‘Commercial’ partners win business for the firm, improve the firm’s reputation which brings in more business, and boost profits.
Law Firm | Trainee First Year | Trainee Second Year | Newly Qualified (NQ) |
|---|---|---|---|
| A&O Shearman | £50,000 | £55,000 | £125,000 |
| Clifford Chance | £50,000 | £55,000 | £125,000 |
| Freshfields Bruckhaus Deringer | £56,000 | £61,000 | £150,000 |
| Linklaters | £50,000 | £55,000 | £125,000 |
| Slaughter and May | £50,000 | £55,000 | £125,000 |
Law Firm | Trainee First Year | Trainee Second Year | Newly Qualified (NQ) |
|---|---|---|---|
| A&O Shearman | £50,000 | £55,000 | £125,000 |
| Clifford Chance | £50,000 | £55,000 | £125,000 |
| Freshfields Bruckhaus Deringer | £56,000 | £61,000 | £150,000 |
| Linklaters | £50,000 | £55,000 | £125,000 |
| Slaughter and May | £50,000 | £55,000 | £125,000 |
Law Firm | Trainee First Year | Trainee Second Year | Newly Qualified (NQ) |
|---|---|---|---|
| Ashurst | £52,000 | £57,000 | £115,000 |
| Bryan Cave Leighton Paisner | £50,000 | £55,000 | £105,000 |
| Herbert Smith Freehills | £50,000 | £55,000 | £120,000 |
| Macfarlanes | £50,000 | £55,000 | £115,000 |
| Travers Smith | £50,000 | £55,000 | £110,000 |
There’s more to being ‘commercial’ day-to-day than knowing what business stories are making the headlines.
It’s about applying your commercial awareness to the work you do for the partners you work with and the clients you advise.
Here’s some examples of what a commercially aware lawyer looks like day-to-day in different scenarios:
Scenario:
A technology startup is seeking legal advice regarding a potential partnership with a larger, established tech company.
The partnership involves shared technology development and a complex intellectual property (IP) agreement.
Your approach:
This is being ‘commercial’ because you are applying your awareness of the client’s commercial objectives to the legal advice you are giving.
Law Firm | Trainee First Year | Trainee Second Year | Newly Qualified (NQ) |
|---|---|---|---|
| Ashurst | £52,000 | £57,000 | £115,000 |
| Bryan Cave Leighton Paisner | £50,000 | £55,000 | £105,000 |
| Herbert Smith Freehills | £50,000 | £55,000 | £120,000 |
| Macfarlanes | £50,000 | £55,000 | £115,000 |
| Travers Smith | £50,000 | £55,000 | £110,000 |
You write emails and memos using short and common words.
Emails and memos are well structured and use short sentences and paragraphs.
Key information is immediately visible, ideas are ordered by priority and headings are used.
Responding is made easy. The next steps you need the recipient to take are made clear.
This is being ‘commercial’ because it makes the communication as easy to understand as possible. This minimises the risk of confusion and optimises for efficiency over ‘sounding smart’.
If you need convincing of this, consider the ‘time tax’ of writing long emails to your colleagues from Writing for Busy Readers:
“Imagine you are sending a three-paragraph message to all 120 employees at your organisation. You deliberate over every word; your high school English teacher would be so proud of you. But then it takes each employee two minutes on average to read what you wrote.
Across 120 employees, your lovingly crafted message will impose a 4-hour time tax. If you cut its length by just one paragraph, you would save 80 total minutes of employees’ time.”
You don’t raise ‘nice to have’ points when you know the client wants a deal done.
You know ‘what’s market’ in negotiations. In other words, you know what the majority of market players currently regard as acceptable on the most commonly negotiated legal and commercial issues in their industry.
This is being ‘commercial’ because it saves time (and fees).
You don’t qualify or heavily caveat your advice to clients.
You give the client a clear risk profile on the issue in question e.g. “I would classify this issue as a low risk”.
This is being ‘commercial’ because it gives the client exactly what they are paying for: the advice of an expert to quantify and, if necessary, mitigate the legal risks relating to their business problem.
The client can then give to their internal team a clear risk assessment of the project. This gives them comfort and makes them look good to their business.
In business there are few things worse than unmanaged uncertainty.
You don’t wait to be asked for updates from other team members. You proactively update the team.
A ‘commercial’ lawyer will flag this with the team leader or matter partner so they can resource the project differently or agree a new scope with the client.
You don’t wait to be asked what you need. You tell your team what you need to get the job done.
A ‘commercial’ lawyer will tell the matter partner what precedent documents they need, which lawyers in other departments they need to speak to for input on the agreement, and how many trainees they need to get the first draft sent to the client by the end of the week.
You don’t just look for problems. You also look for solutions.
The best associates don’t just stay stuck. They speak up to get the additional understanding they need to do their job: you are not yet the finished article as a lawyer. You’re not expected to have all the answers. That’s why you’re an associate, not a partner.
These are all characteristics of a ‘commercial’ lawyer because you are consistently pushing things forward, proposing plans, asking for resources and, most importantly, getting things DONE.
“rEaD ThE FiNanCiaL TiMeS!”
Yeah, there’s little more to it than that. But it’s not rocket science. Here’s what you should do:
Regularly read the business section of newspapers, financial newspapers, and legal publications.
Make this a habit, a part of your day. It only needs to take you 15 minutes.
The aim of the game here is to get a feel for the top stories and to try and spot trends.
For example, the big business trends of 2023 in the UK were:
Keep your finger on the pulse of the big trends.
In our example, you should know what the latest inflation rate (CPI) figures are, what the Bank of England’s base rate currently is, and you should be able to name a couple of the big companies delisting from the LSE.
Here’s a list of the publications we would recommend you look at regularly:
Subscribing to a newsletter which summarises all the top stories for you is a great way of keeping on top of things.
Non-Billable does this for lawyers, summarising the top legal and business stories you should know about.
Here are some others that are business and finance focused:
Attend events, workshops, and networking functions (inside and outside of your law firm).
Events and talks will give you insights into industry trends. This by itself will make you look good but it will also build your network.
No one enjoys networking. It always feels like a chore. But doing it consistently will put you ahead of your peers.
It’s about becoming known to as many people in your law firm and in the industry as possible.
At our law firms, the most successful lawyers we worked with were also the most well-known in the department.
They didn’t lock themselves in their corner office and stare at documents all day.
They took the time to get to know other lawyers in the department, to share knowledge and insights with other team members, and to deliver talks and briefings on the key legal and regulatory developments.
Everyone viewed them as ‘commercial’. They weren’t just good at law. They were great communicators and clients loved them too.
When you build relationships within your law firm you’ll also be able to take advantage of perhaps the single most important way to become a better lawyer: you’ll be able to learn from experienced colleagues.
These experiences will shape your own career.
If you can make your clients look good to their own businesses, you will win.
Be the lawyer who is on top of the latest legal updates in your practice area. The most important cases, the latest piece of legislation everyone in your sector is talking about.
Tell your clients about them even if you’re not working on any live matters for them at the moment.
Give them the TLDR: what they need to know and why it’s important. Invite them to call you if they want to know more.
Deliver training on specific topics within your own department. This has 3 benefits:
It’s as simple as being an active, well-known and helpful member of your department.
The best lawyers understand this and it will put you ahead of your peers because most of your colleagues - no matter how intelligent they are - won’t do these things.
Hopefully all of this helps you understand what it means to be a commercially aware lawyer.
Apply this advice to your work day-to-day, use it in interviews for training contracts or junior associate roles.
Take it from us. If you apply it correctly, it will turbocharge your career in law.
Good luck.
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