From AI to interest rates — lawyers have their say
Commercial awareness can be a challenging concept for aspiring lawyers to understand. What does it mean? How can you develop it? And what are the key issues students should focus on as they prepare for training contract applications and interviews?
To address these questions, Legal Cheek recently partnered with The University of Law (ULaw) and solicitors from six leading law firms to host an event titled ‘The Big Commercial Awareness Themes of 2024-25 — with DWF, Goodwin Procter, Irwin Mitchell, Lewis Silkin, Morrison Foerster, TLT and ULaw’.
We heard from lawyers across a wide range of practice areas, including medical negligence, data privacy, and public inquiries. The panellists offered diverse insights into how today’s major commercial trends are impacting solicitors and their clients.
ULaw’s careers manager, Kat Meehan, also joined us to provide valuable advice on how applicants can effectively demonstrate their understanding of these trends during the recruitment process.
AI
We kicked off our panel by discussing AI — the hot topic which has been on everyone’s lips this year. AI is affecting the type of work which lands on solicitors’ desks across firms, drives developments in the sectors they work in and is slowly changing the day-to-day practice of law.
We heard from Tughan Thuraisingam, partner in the data protection, privacy and cyber security team at DWF, about how developments in AI are affecting his clients. “I had a call from a client just last week who was concerned that one of their providers has started using an AI system,” he explained. “Our client didn’t have any clarity on how this system was using data. The GDPR focuses on ensuring that individuals have greater control over their personal data.” Yet as more business begin to use AI, “the way data is being used is becoming more and more obscure”.
Developments in AI technology are also raising questions in the medical negligence team at Irwin Mitchell, where Emma Rush is a partner. “If use of AI in healthcare became widespread, we would have to see an overhaul of the legal test to establish legal liability,” Rush explained. “You can’t take a witness statement from a robot, so who would be the defendant?” she asked. The medical negligence lawyers of the future could well be sitting across the table from software developers as well as doctors and NHS trusts.
Kat Meehan, careers manager at ULaw, shared her advice on how applicants can best respond to application questions on this hot topic. “Students often give very general assessments of the impact of AI on solicitors,” she said. “Recruiters want to see candidates who can give specific details of how AI will affect various legal practice areas.”
Interest rates
This is another topic which has dominated commercial news headlines over the past few months. Interest rates have risen steadily from the beginning of 2022 after dropping to record lows. We heard from our panellists about how this affects their clients.
Ravi Chopra, a partner in the private investment funds team at Goodwin Procter, discussed how the private equity houses he advises adapt to market conditions. “My clients consider what strategies to launch depending on the interest rate environment,” he said. Private equity firms typically buy companies with the goal of selling them later, known as “exiting”. Chopra added: “When interest rates are volatile, particularly if they are increasing, you might have a slowdown in exits because businesses are not sure how much things are worth, or buyers might be struggling to raise money.”
We heard more on interest rates and M&A deals from Luke Rowland, of counsel in the corporate M&A team at Morrison Foerster. Rowland’s clients “tend to be larger listed multinationals.” These companies are less heavily affected by interest rate fluctuation than the PE houses that Chopra works with. “My clients are often funding acquisitions from the balance sheet,” he told us — i.e. without raising outside capital. Additionally, the economic environment has meant “share prices are at an all-time high which is a good thing for listed companies”. Rowland explained that “there are winners and losers in every type of economic environment”.
Politics
Major political elections have also been a topic of discussion this year, with the election of Kier Starmer’s Labour Party in the UK and the recent election of Donald Trump across the pond. Our panellists discussed how changes in government, particularly here in the UK, are affecting their practice areas and their clients.
Michaela Bolton, senior associate in the public inquiries and public law team at TLT, explained that “public inquiries are independent of government although they are bankrolled and initiated by governments”. However, “the decision to commission an inquiry rest with government minsters.” This can mean that the type of inquiries that spring up can be influenced by the goals of the government of the day. “I’m looking forward to seeing how the practice changes in the next few years,” Bolton told the virtual audience.
Rush shared an insight into how the medical negligence field might be affected by the latest budget. “The national insurance increase set out in the budget wasn’t accompanied by an increase in funding for GP practices,” she told us. NHS trusts, on the other hand, received additional funding to cover this national insurance hike. “As employment costs rise, I wouldn’t be at all surprised to see GP surgeries replacing doctors with lower cost roles which don’t have the same level of medical expertise.” In Rush’s view, “there is the potential for this to impact patient care going forward and we might see more medical negligence cases relating to primary care.”
ESG
Environmental, Social and Governance (ESG) principles are encouraging businesses across sectors to consider their impact on the world around them more carefully — and law firms are no exception.
Sam Pennington, corporate partner at Lewis Silkin, chairs the firm’s responsible business group. Founded by Lewis Silkin, a Lithuanian refugee who rose from humble beginnings to qualify as a solicitor and win a seat in parliament, this firm’s relationship to ESG principles goes back a long way. “We were founded as a law firm doing legal aid work in Peckham with a strong social mobility story of our own,” Pennington said. But ESG considerations are now relevant to all law firms. “Even law firms who have been historically unconvinced by ESG agendas are being dragged there by their clients and they’re being dragged there by their staff. People now want to work at a firm which aligns with their ethics.”
In Pennington’s view, the pressure to adhere to these principles is only set to increase. He references the UK’s new target of an 81% emissions reduction by 2035, recently announced by Keir Starmer, stating, “pressure on businesses is going to have to ramp up if the country is going to hit these targets”.
How can you show off your commercial awareness?
So, we have heard from our panellists about how these big issues are affecting their practices, but how can aspiring lawyers best show off their commercial awareness in the recruitment process? ULaw’s Kat Meehan was on hand to share her insights.
“Students do really worry about not being commercially aware enough,” she acknowledged. “It’s important to know that you aren’t expected to know everything.” Therefore, you should be selective about the issues that you do choose to follow:
“Make sure you choose to follw issues that you have a genuine interest in and track developments over time,” Meehan said. “It’s going to be very difficult to get up to speed the night before an interview.”
As well as choosing topics that you are interested in, it’s equally important to make sure they are relevant to your target firms. “Ask yourself how the issues you’re interested in affect the sectors that the firm advises,” Meehan said. She also shared some practical advice for spotting which issues are most relevant to which firms: “Look at what news stories they are covering on their websites, through LinkedIn posts or blog articles. This is a big clue as to the hot topics that are relevant to their clients.”
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