How Tax Pros Can Shift From Government to Private Sector Work

With the reduction in the federal workforce, more tax professionals are transitioning from public service to the private sector and bringing a wealth of knowledge that will benefit their new employers, colleagues, and clients.

Many of these professionals are entering private practice with limited, if any, experience working for a private firm. While legal knowledge can transition, representing individuals and entities and developing business require a different set of skills.

Tax professionals in private practice help clients achieve objectives, manage financial affairs to legally minimize tax burdens, and become and remain compliant with tax and reporting objectives. They also need to identify and engage with clients who seek these services.

Building a client base is one of the least attractive aspects of private practice to government employees. But preparing a personal business plan can help in overcoming this hurdle.

Start with personal objectives. Then, describe your recent work experience. You can follow this with a more detailed review of your professional history, highlighting areas of interest to potential employers. This shouldn’t be a duplicate resume or bullet point list—a business plan tells a story.

If you have experience in private practice, discuss your prior status, work schedules (average billable and nonbillable hours), and originations and other financial data points. Next, describe the type of work you want to do and the clients you want to represent, as well how you’ll build your own brand over the first three, six, and 12 months.

You can include active participation in professional organizations, speaking opportunities, publishing articles and other educational materials, and potential referral sources. And, as a former government employee, you can include post-employment restrictions.

Spend time on your business plan and share drafts with trusted friends and colleagues. A good plan doesn’t just introduce you to a potential employer or explain why the employer should hire you—it also reminds you how much you have accomplished and can offer.

Understanding imperfection is a basic truth of private practice. Our clients aren’t perfect; they’re human, and it’s our job as to represent them to the best of our ability within the profession’s ethical guidelines. While this may seem simple, it can be a struggle for many tax professionals who are used to advocating for the government.

Clients often have multiple—and sometimes competing—stakeholders and objectives alongside their primary legal issue. For example, a client wanting to resolve a pending tax dispute may be dealing with issues of reputational harm, viability of an existing business, immigration status, or family dynamics.

Unlike your role in the public sector, your clients need you to help manage these collateral concerns. Effectively representing an individual or entity requires your time to identify these issues, discuss them with the client, and evaluate how to mitigate the concerns.

Clients want to understand, manage, and generally minimize legal fees and expenses while receiving the highest quality legal representation. In a profession that often bills in six-minute increments, it’s crucial to clearly explain from the start how time is billed and how fees are collected.

Ask clients whether they have questions about fees and anticipated expenses, and issue timely periodic and clear invoices to minimize billing conflicts and fee disputes. Careful and precise billing is an absolute must—working a 10-hour day doesn’t translate to 10 hours of billable time.

When you anticipate a busy month, new issues to address, or many extra expenses, discuss the issues with the client in advance to confirm they understand the nature of and need for the work or expense, and confirm that the work or expense is authorized. Tax controversy matters often involve specific amounts at issue, and clients aren’t interested in paying more for legal services than they would have to pay if they simply conceded the dispute.

In tax planning matters, the client often will request a budget for legal fees, and counsel will need to monitor the fees and update the budget through the engagement. Attorneys should do their best to give realistic estimates of fees and expenses and check in as the matter progresses to identify any changes.

Tax professionals in private practice advocate on behalf of and/or defend their clients. Former government attorneys often find themselves making arguments they once challenged, and across the table from former colleagues.

As private counsel, we must advocate without pulling punches based on prior personal or professional relationships, and without being overly aggressive, overly confident, or overly familiar. Some former government attorneys find this aspect of the transition difficult. Remember that everyone has a role to play and, at the outset, it may help for those in private practice to pair up with a colleague during initial meetings with their former agencies.

While clients appreciate the experience and insight former government attorneys bring to a matter, they may wonder if their attorney can “switch sides” and play for the defense. Knowing how the government will approach a factual or legal issue is invaluable, but clients expect this information to pair with opposing arguments and lead to potential solutions.

Attorneys leaving the public sector—particularly those who have worked for the government for many years—may believe that private practice is less fulfilling or, in some cases, less honorable. While the for-profit aspect of life in a law, accounting, or consulting firm can be a burden at times, the private sector can provide new and previously unavailable benefits and opportunities.

Developing close relationships with your clients, their coworkers, and their families can be incredibly rewarding. Joining and actively participating in professional organizations can foster relationships, expand your knowledge, provide speaking and writing opportunities, and build your network of potential referral sources. Accepting pro bono assignments provides the opportunity to give back.

There are unlimited opportunities, and your new colleagues stand ready to welcome you into the fold.

This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law and Bloomberg Tax, or its owners.

Author Information

Caroline Ciraolo is a partner and founder of Kostelanetz’s Washington, D.C., office.

Abigail Burke is an associate at Kostelanetz in Washington, D.C.

Diana Erbsen, a partner at DLA Piper in New York, contributed to this article.

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