November 18, 2016 Paths in Tax

C. David Anderson on Stress in Tax Practice

By Matthew Sontag, Tax Manager, RSM US, LLP, McLean, VA

Editor’s Note: This edition of Paths in Tax changes course slightly to address a topic of perennial, albeit muted, concern within the tax bar—emotional health and anxiety management. Our featured member, solo practitioner C. David Anderson, articulates our collective challenge in a new way. He then provides useful advice to mitigate damage that may be done to emotional health in the course of practicing our chosen profession.

A Lawyer’s Job Creates Stress

The work of pioneering lawyers-turned-psychologists, such as Professor Joseph Bankman at Stanford Law, has clearly shown the profound impact that the legal education system has on emotional health. An estimated one-third of lawyers face significant depression or substance abuse problems, among the highest percentage facing mental health issues for all professions.

Bankman and others have also proposed various solutions to these emotional health problems, and those solutions are slowly gaining traction. Building on this new scholarship, David Anderson draws our attention to the unique characteristics of tax law that may disproportionately trigger stress mechanisms, particularly for new practitioners. Without doubt a tax lawyer’s unhealthy relationship with cortisol, one of the key hormonal stress markers, starts like every lawyer’s—in our first year of law school. It escalates through our first federal income tax course and continues to grow as we dive into those upper-level tax courses. It doesn’t stop there, because the uniquely demanding challenges of tax practice continue throughout our careers.

Anderson primarily attributes our collective battle with stress to the sheer complexity of the tax law. It is both very detailed and very broad and, somewhat unusually among legal fields, tax is something that even a good lawyer may get completely wrong. Tax complexity is compounded by the frequency of change in the tax law; there is no end to our learning process. While this is a key attraction of the profession, it nevertheless creates constant uncertainty that can drive anxiety. Anderson also notes the surprising variability of tax knowledge even among extremely smart outsiders, meaning we function more on our own, professionally, compared to other attorneys’ who practice in an area of law that is more accessible to their legal peers and to non-lawyers. This potent mix of ambiguity and isolation regularly produces situations where we can craft reasonable, well-articulated arguments, readily accepted by our colleagues, that just happen to be wholly incorrect. That risk weighs on us. Just as homeowners sometimes sit bolt upright in the middle of the night suddenly panicked about a leaking showerhead, so too we tax lawyers wake up to rethink our conclusions from the day before.

Unfortunately, this analogy leads directly to Anderson’s second key point. While a showerhead has a black and white answer—it’s either leaking or it isn’t—tax isn’t so kind. The further we advance in our careers, and the more others rely on our opinions, the less often we find clear answers. Our world loses what black and white it had to become endless shades of grey. Recognizing that loss of clarity only compounds our stresses.

In Anderson’s experience, the inherent predisposition to stress in our field is exacerbated by the regularity with which professional practice throws brilliant but inexperienced attorneys directly into the deep end, especially in transactional and financial institution practices. The great trust placed in tax professionals by their colleagues and clients can become ruinous pressure for early-career practitioners. Business lawyers have a habit of saying things like “just tell me whether it works for tax purposes.” Our active imaginations—such a strength in our industry—can transform into a liability as we overanalyze every single component of a question.

Anderson also points out that we are regularly left with only our own carefully constructed conclusions, often lacking a non-judgmental mentor, colleague, or even subordinate to whom to turn for a second opinion. The potential for professional isolation is particularly challenging given the constantly changing tax landscape. Large sections of our experience, which in other fields would produce a reasonably reliable and constant foundation of knowledge, come undone under the force of frequent legislative and regulatory change. Months spent analyzing a particular topic can unravel at the stroke of a pen—an unraveling that we might, under the pressures to produce, fail to recognize before delivering the advice.

Anderson concludes that these factors converge to produce a profession with a 20-40 year learning curve before we can truly “trust our gut.“ Getting there takes forever, and in the meantime, there is little room for “winging it.”

Addressing the Challenge from Within

Anderson suggests techniques we can use to address our challenges. The most effective way to mitigate stress is to avoid it when possible. The first step is to know our clients. It is vital to learn quickly that unfamiliar people might be dishonest. Taking time to really understand those seeking our input—whether from outside our firm or colleagues within our own work environment—can provide valuable insights that will help us steer clear of stressful situations.

Second, Anderson reminds us to respect the different levels of tax knowledge outsiders have, even extraordinarily intelligent ones. Often these individuals don’t understand the importance of information they haven’t provided or even that they don’t understand what we have told them. It falls to us to confirm their understanding. Anderson likes to borrow a technique from a good friend, a minister who regularly illustrates his points through stories and parables. In its tried-and-true way, this approach allows a potentially difficult topic to be simplified into an everyday situation, readily available to the listener. The key is to add a post-story quiz: always ask listeners to repeat back, in their own words, the primary lesson. By confirming that the audience understood well enough to restate the main point, we ensure that we have communicated well.

Third, Anderson recommends focusing on the relevance of a given analysis—are we looking at an issue that exists now, or one that may arise twenty years down the road (or never)? He remembers a fascinating lunch conversation around the (then) newly enacted section 83(b). Questions raised would not attain practical importance for over a decade, and certainly did not need deep exploration at the time. There was thus no reason for that discussion to create stress.

On the flip side, Anderson emphasizes the importance of awareness of the rate of change in the tax landscape, particularly as a marker of needed focus. Ideas have a way of expanding exponentially, so a few whispers may soon become a chorus. The way that a transaction is viewed can evolve significantly over the course of time, for better or for worse. Careful “thought triage” at the outset can ensure that we remain focused on the right areas at the right time.

Inevitably, however, we will find ourselves having to make a tough call, and no amount of explaining or planning will eliminate the risk of anxiety. Anderson’s best recommendation here is to build up a rolodex of nonjudgmental allies to whom we can turn for assistance. In many cases, the key differentiator for professional success is the presence of a trusted mentor.

Also, we need to listen to common sense. One of Anderson’s favorite aphorisms, picked up from his former wife, is that “laws are condensed common sense.” He puts an additional spin on the phrase, advising that if the answer doesn’t seem right or fair, we should keep digging, because “it’s not about the rules, it’s about the facts.” When all is said and done, tax law often reaches an answer supported by common sense. If we haven’t gotten there yet, we probably need to keep working.

Despite our best efforts, however, anxiety will catch up to us when the unavoidable happens. We will make a mistake. There is no use pretending it won’t happen—it will. The only solution is to find mechanisms for dealing with the repercussions. First and foremost, Anderson advises thinking through the consequences and working out the worst that can happen. As Anderson says, “we are not going to die as a result of a mistake, and ultimately everything else can be dealt with.”

Second, as Bankman suggests, we should think about what we would tell our best friends who found themselves in similar situations, and then tell that to ourselves. Better yet, we should actually talk to our best friends, and let them tell it to us.

Also, it’s worth considering how to respond when someone else makes a mistake. Of course, the mistake should be pointed out and corrected: we really cannot do otherwise. Anderson’s advice is to approach the situation gently. It helps to remember that the next time it could be us making the mistake.

Moving Beyond Self-Help

Ultimately, self-help can only do so much: we also need to help each other. First, we can leverage our direct community by sharing our struggles. As Bankman has discovered, it is cathartic to law students to realize that others face the same demons. Always be alert to the possibility of helping others. If we begin to see warning signs in a colleague, we should ask them how they are doing. Sometimes all it takes is a question to give someone permission to turn to us for help they desperately need. In particular, we should watch for situations where the expected results, given a person’s capabilities and background, don’t line up with what that person is delivering.

Second, we should seek help when we need it. Adopt a “mindfulness” or yoga practice. Many of these techniques have a sound basis in science, such as the proven ability of meditation to lower blood pressure. We should go see a professional therapist. They are trained and capable of assisting us in taking care of our emotional health.

Third, and perhaps most important for the future, we need to work within our professional organizations, whether it’s the local bar association, the state bar, the ABA Section of Taxation, or another group, to establish a network of resources for professionals struggling with emotional health challenges. These networks, such as New York City’s “match.com”-style service connecting individuals with professional resources, can be precisely the support necessary to get our colleagues the help that they need.

Anderson closes by saying that many of the struggles we face as tax professionals cannot be eliminated, so it is critical for us to address the ones that can. Until we all take proactive steps to address the problem, it will remain a perennially unspoken challenge.