What does 'being commercial' mean?
Tips & Tricks
In the legal world, you’ll often hear that ‘being commercial’ is one of the most important aspects to professional life. So why does nobody seem to know what this means?
Here at Flex Legal, we’re nothing if not curious. We wanted to get to the bottom of this puzzling dilemma, so invited two experts to our most recent Virtual Lunch to help shed some light on ‘Being Commercial and what that means’. Joining us for the discussion was Rustam Roy, Senior Commercial and Privacy Lawyer at The Legal Director, and James Carter, Head of Bid Management at Peppermint Technology.
The conversation was fantastic and shed an awful lot of great light on this notoriously evasive topic. Here is our recap of the main points that emerged from the discussion:
What is commercial law?Let’s start with the basics – how do you define commercial law?
In short, commercial law is law that deals with commerce. In other words, it’s a wide-ranging term that generally refers to the legal side of business. This refers to legal tasks that fall under the umbrella of ‘commercial law’, but can also refer to the practice of ‘being commercial’.
Firstly, commercial law is a range of legal services that help businesses operate and generate revenue. A ‘commercial lawyer’ would be a lawyer that negotiates and manages contracts, paperwork, or businesses arrangements. For example, let’s say you’re a lawyer who works for an exciting young record label ‘Very Cool Records’. Your role might be to help draft new artist agreements, or negotiate intellectual property disputes, or manage venue terms for touring artists.
Secondly, when you hear the term ‘being commercial’ this basically means having an awareness of how the business that employs you operates, and knowing how the wider industry works. You might have also heard this referred to as ‘commercial awareness’. If you, as a lawyer for Very Cool Records were ‘being commercial’, you would understand the business structure of the label, know how the label generates revenue, and be aware of trends and events in the wider music industry and how they could affect the revenue of Very Cool Records. If you can do all of these things, the CEO of Very Cool Records (John VeryCool III) might just say to you “wow you’re being very commercial”.
Now that we’ve covered what commercial law and ‘being commercial’ means, let’s break down some more practical tips for being commercial. Rustam and James were able to offer some great industry insights and tips here.
Focus on outcomesOne of the most crucial components of being commercial is focusing on outcomes. A contract, ultimately, is just a tool to facilitate an outcome. Drafting an elegantly designed contract with a luxurious, flowing layout counts for very little if the actual function of the contract is poor. Your ultimate aim should be to achieve outcomes that deliver on the needs of the business and key stakeholders.
Let’s say, for example, you’re trying to draft a contract between Very Cool Records and Artist A. In a completely ideal scenario, you would deliver a contract that delivers outcomes both Very Cool Records and Artist A are happy with. Both parties should know exactly what the contract realistically means and what their obligations are. Moreover, the contract should be deliverable. Being commercial means being informed about the actual practical reality of the services you provide, and facilitating agreements that actually benefit the parties in question. John VeryCool III would love it if you remembered this.
Consider risksAnother important trick to being commercial is to consider risks. Where possible, eliminate them entirely. If you can’t eliminate them entirely, pragmatically manage them so they are minimised. This is exactly where your ‘commercial awareness’ comes into play. If you understand the realistic function of the business, as well as the wider industry, you are well positioned to foresee potential risks to any agreement you help facilitate.
For example, you’re drafting a recording contract for Artist A – but you know they are notoriously difficult to work with. They are a have been known to loudly protest their employment terms at awards ceremonies, and perform outrageous and controversial stunts during live performances. You know this would prove incredibly time consuming for the legal and HR departments at Very Cool Records to deal with, and might damage the reputation of the label. You could, for instance, try to draft terms into the contract stating that Artist A is completely prohibited from doing making such outlandish outbursts, but you know this would likely just encourage them more. Realistically, you would be better situated to try where possible to minimise those risks.
Remember – use what you practically know about the business and wider circumstances to minimise potential risks where you can. If you don’t know what possible risks are, you should at least try to know who to speak to about identifying them. John VeryCool III would really appreciate it if you did, and maybe send you a gift basket, which leads us onto our third and final point.
Be a pleasure to work withThis one might sound obvious, but is all too often overlooked. Being a friendly and likeable person behind the legal function of your role can go a really long way towards helping you achieve good outcomes and minimise risks. You’re more likely to glean key insights about a stakeholder’s expectations if you can engage with them informally. You’re more likely to collaborate well with other legal professionals if you get to know them personally. You’re more likely to get the answers you want regarding a situation if you get stakeholders used to fielding your questions.
One of the things that both of our speakers encouraged us to consider was what law often doesn’t teach you to do. You can have the world’s most encyclopaedic knowledge the ins and outs of tort law, but that doesn’t mean you can communicate that in an accessible way to clients. Many people have an impression of lawyers being “the no police”. You have to understand your industry and it’s norms, and be able to match them so you’re not seen as an exclusively negative external element. Even a basic ability to be human, engaging, and customer-oriented will help you be a more effective legal professional.
Finally, remember that being a pleasure to work with does touch upon the two previous points. Commercial awareness means knowing what stakeholders are trying to achieve (be that profitability, KPIs, NPS), contextually understanding potential risks to achieving those goals, and considering those in the outcomes you chase. You will always have a substantially easier time doing this if you start with yes, figure out what all parties want in a friendly way, and use that as your jumping off point for everything that follows.
So there are you are, a short crash course on being commercial. We really hope you’ve found these points helpful, but we do understand there’s so much more to consider beyond what we’ve listed here. Make sure you sign up to future Virtual Lunch events for other great insights from the best minds in law, and check out the additional resources below for more info on being commercial.
- Sign up to future Flex Legal events - sad you missed out on this great event? Worry not, you can always catch the next one. See our upcoming Virtual Lunch events here on eventbrite!
- 15 practical ideas to embed being commercially aware into your everyday activity - this PSL link from our friends at LexisNexis is accessible via a free trial, and offers tips and guidance to honing crucial commercial skills.
- What is commercial awareness? - a slightly older post from ourselves, covering some fairly familiar ground to this one. The post covers commercial awareness slightly more specifically, and is well worth a read (if we do say so ourselves).