As an aspiring commercial solicitor, I often hear the phrase ‘commercial awareness’ and how essential it is to have a good understanding of the skill – to demonstrate this during interviews, when speaking to clients and in the legal environment you chose to work in. But what exactly is commercial awareness and how do you acquire the skills and knowledge?
Well, for me, when broken down, commercial awareness means having strong business acumen. This is a core element of Commercial awareness. In the legal world it is important to have a good understanding of the client’s business, in order to advise effectively and apply the relevant law in the most strategic and forward-thinking way. This article defines what business acumen is, how to apply the skill in your legal career and more about how you can develop this commercial astuteness.
What is business acumen?
At its core, Business acumen is defined as the ability to combine experience, knowledge, perspective and awareness to make sound business decisions. The development of this ability leads to better judgement and allows you to view organisational needs in a holistic long-term way. Some of the key skills to develop and strengthen business acumen are identified as: Assessment, Vision and Discipline, Emotional Intelligence, Experience and Learning organisational processes.
The importance of business acumen in a legal career
Business acumen and commercial awareness are now required skills for lawyers. It’s more than just the black letter law or applying theory to practice, it is about understanding the implications of a decision to the business and finding the best commercial solutions to any situation. A recent Harvard Law School study identified the most crucial skills that lawyers in new age markets need to develop. At the top of the list were skills such as accounting, the ability to analyse financial statements, understanding financial markets, business strategy and industry analysis. Their conclusion, simply put, was that lawyers need strong business acumen.
A client expects their lawyer to fully understand how their business is run and which wider social, political, technological and economic (PEST) issues may affect them. It is also necessary for lawyers to appreciate the short, medium and long-term implications of their client’s business proposal and think strategically about the organisations Strengths, Weakness, Opportunities and Threats (SWOT analyses).
This enables lawyers to provide pragmatic, business-minded legal advice to the best of their ability. “Businesses make decisions based on a variety of factors, and there’s a lot to consider. It is important that lawyers or legal counsels can provide advice from a big picture perspective, looking at all the moving parts of the business together through a legal and business lens”. Some key skills identified are: Assessment, Vision and Discipline, Emotional Intelligence, Experience and Learning organisational processes.
Despite its misconceptions, business acumen is largely a learned skill, not innate. It is the ability to weigh up situations quickly, making a logical decision confidently and influencing others positively. If you naturally look at the work in front of you with curiosity, then you are already part way there, it is an understanding of how different factors impact on each other. Some of the ways to develop your business acumen can be the following:
- Speak to and communicate with all the departments in your organisation to learn what they do and how they operate.
- Listen to business radio stations and podcasts.
- Follow the news on a regular basis.
- Understand your local market and wider markets.
- Gain work experience – particularly customer facing
To conclude, business acumen is a skill that is acquired through experience and learning it is not innate. It is important for Lawyers or Legal counsels to provide advise from a big picture perspective looking at the whole operation of the business through a legal and business lens, this allows for more engagement leading to the success of the business. Having strong business acumen allows for better communication with all the departments within an organisation assessing the the potential risks that would have an impact on the company strategy and ultimately revenue. Lawyers are ultimately becoming critical business partners whose ideas and insights are sought after. That is what business acumen is all about.
Business Acumen is often described as a business savvy and business sense.
It is the “keenness and quickness in understanding and dealing in a business situation (considering the risks and opportunities) in a manner
that is likely to lead to a good outcome”.
“Ability to combine experience, knowledge, perspective and awareness to make sound business decisions”.Blogspot.com
By Maryanne Sanyaolu – Arden University London
All BeComAware content is reviewed and approved by a professional in industry.