TaxDiversity Interview: Sam Thompson Samuel Thompson, currently a professor of law at Penn State s Dickinson School of Law and the founder and director of Penn State s Center for the Study of Mergers and Acquisitions, earned a BS from West Chester University, MA in Business and Applied Economics from the University of Pennsylvania, J.D. from the University of Pennsylvania and LL.M in Taxation from New York University. Professor Thompson was previously a professor of law at the University of California Los Angeles School of Law and director of the UCLA Law Center for the Study of Mergers and Acquisitions and is a highly regarded scholar of corporate and international tax, corporate governance, and antitrust. He is the author of sixteen books and more than 75 articles. His teaching interests focus on the corporate, securities, tax, and antitrust aspects of mergers and acquisitions as well as international tax, investment banking, taxation of business entities, and economic growth policy. Throughout his distinguished career, Professor Thompson has held a number of notable positions, such as head of the tax department of Schiff Hardin & Waite in Chicago; tax policy advisor, on behalf of the U.S. Treasury Tax Assistance Office, to the South African Ministry of Finance in Pretoria, South Africa; Attorney Fellow in the Securities and Exchange Commission s Merger and Acquisitions Office; consultant on merger and acquisition issues to the Federal Trade Commission; and professor in residence at the European Commission s Antitrust Merger Taskforce in Brussels. On several occasions he has testified about tax policy before the U.S. House of Representatives Committee on Ways and Means and the House Judiciary Committee. He formerly served as dean of the University of Miami School of Law and has been a professor and distinguished visiting professor at the University of Virginia School of Law and the Jacquin D. Bierman Visiting Professor of Taxation at Yale Law School. Tax Diversity: From your perspective, can you describe for us what the climate was when you initially got into the field and then contrast it to where it is today in your words. Sam: I originally got interested in corporate tax, which is something I am working on right now on the international side, when I was in law school; at the University of Pennsylvania there was a great corporate tax teacher named Bernie Wolfman who is a professor at Harvard now. I had a great corporate tax course and I also had a great corporation s course. When I graduated in 1971 I either wanted to be a corporate lawyer or a corporate tax lawyer. I went to a law firm that allowed to me to do both, Davis, Polk & Wardwell in New York, before I d have to make a decision. I gravitated towards corporate tax; I found I liked the tax law better than the pure corporate work. I started studying for my masters in tax law at NYU and I got that and went into law teaching. I taught tax courses at Northwestern and it deepened my knowledge and interest in the subject, building on my knowledge base and gaining a real love for the area. Now, I didn t know any other non-white corporate tax lawyers when I was coming up. I didn t know of any. I just got interested in the subject matter and was fortunate enough to get good grades in law school and was able to get a good job out of law school that gave me the ability to build on my interest. The problem is that you have to have people that are interested in this subject matter and what Glenn Carrington is doing is trying to develop that interest among young people who are in college. That s when you have to get people, and try to get them interested in the subject and hope that some of them will be turned on by it. Not everybody is cut out to be a tax lawyer, as you know. I think that if people
understand the opportunities they might have more of an interest in it. I m not sure I m being much help here. Tax Diversity: No, I think you are framing up the issue quite well here as far as the emphasis on catching the students early on and getting them educated on what tax professionals do, whether it s a tax legal profession or tax accounting profession, or a combination thereof. I think the point is to get them early and get them out before they form up any opinions. I think you kind of had a fortunate situation where you had a professor who exposed you to the area, even though there weren t any role models specifically that you could point to or other candidates of color; you kind of blazed the trail yourself, it sounds like. I think in some respects too much emphasis is put on this model thing. Sam: If someone is interested in a subject matter and digs into it and goes to work at it and tries to become good at it without respect to whether there is a role model. I mean if we simply waited for role models, nothing would happen. Tax Diversity: Right. You couldn t afford to wait for a role model, because in your case there weren t any. Sam: Yes. I never said Oh god isn t it horrible? I don t have a role model to look up to. That never entered my mind. What I said was, Look, this is a subject matter that I like, I like learning about it. I m doing a presentation on An Overview of the US Tax System for Taxing Outbound and Inbound M&A Transactions for the ABA. I m putting it together, and I have a 42 slide package over here for PowerPoint and a 100 page paper that I put together with a former student of mine, who used to be a my research assistant at the University of Miami. And I am loving it. And had I waited for a mentor I wouldn t be doing what I am doing now! Tax Diversity: What is it about the subject matter that really piqued your interest early on? How would you describe what it is about tax as field that got your interest? Sam: I m not interested in all tax. I don t know anything at all about state tax, property tax, and I know very little about personal income tax, although many years ago I taught personal income tax, but I am not interested in that stuff. What I am interested in is corporate and international [tax]. I like the intersection of corporate securities and tax law. I like playing the tax rules to get you a particular result. That s what I like to do. Why do I get turned on it? I don t know. But I do! Tax Diversity: As you look at prospective students as you did when you were a professor and even when you were a practitioner and you are looking at individuals; do you feel there is a certain profile that you think will be attracted more to the tax profession? Could you capitalize what that profile might look like? Is it unknown, or we won t know until they get there type of thing? Sam: The first thing is you have to have a love for it, if you don t have a love for it you aren t going to be a good tax person. And you have to be enthusiastic. Let me just give you an illustration. I m a black guy and the guy I am working with, Robert Clary is a white guy who was my research assistant at University of Miami. I am going to make this presentation in Dallas, Rob will be there but I will make the presentation. We are going to be making a similar presentation in Frankfurt, Germany in May. Now it turns out that I won t be able to make it to Frankfurt so Rob will be making the presentation in my place. He started working with me when he was a freshman at the University of Miami and he
would get to work an hour early and stay two hours past the end of the workday. And if I said Hey Rob, I need this done, he would respond with Well how high would you like me to jump? He would just throw himself into things and he s always just as pleasant to work with as possible. So you got a guy who is interested in the subject matter, who s got talent for it, and who s enthusiastic about it. And what more can you ask for? I mean I would love to have more Rob Clarys. I would love to see them come around all the time, but they don t! That s the type of profile of people that I know that are going to be successful in the business. Tax Diversity: As you kind of turn to what s going on out there in the companies, the corporations, since your focus is on corporate taxation, in particular both domestic federal and international tax, and you were advising a CFO of a major company about how to diversify the tax function their department; what advise would you give to that organization in this current market the way you see it? Sam: Well, it s going to be tough to do it. I would look at people going into the Internal Revenue Service or into the Justice Department under the tax division. I would be aware of minorities who are in those positions. I would also try to be aware and track minorities who are in law firms as tax professionals. I would try to keep abreast of their careers; I would make it an ongoing process of trying to do my due diligence on the market place. Tax Diversity: So in essence, just building a sub database of who these professionals are early in their career and tracking them so you can contact them when windows open up and you have something for that potential candidate? Sam: Yes. Give them a call and say, Hey, I want to talk to you. I remember when I was in the Treasury Dept. in the Tax Legislation Council s Office, I had a lady headhunter call me and say Hey look I want to have lunch with you. She came down to Washington. She was from New York, and had lunch with me. She offered me a job with a company that she thought I would be interested in. I went back into law teaching so I didn t consider that company and I don t know how she got my name. But I do think that that kind of proactive initiative on her part is something that I would undertake. Tax Diversity: So these companies themselves or even third party recruiting firms are working to establish an identification process for these diverse candidates and there is some sort of tracking to stay in touch with them, to make sure timing is in sync with each other and with openings that might be at those companies. Sam: Yes. If I was in house at a big company and I was interested in doing this, then that is what I would do. Tax Diversity: Now you had mentioned mentors, which in your case was very much a non-issue because there weren t any. Ironically when we talked to Glenn he went out of the way to talk about how important it was to have a role model involved and a mentor like you throughout his career. In his case, in his mind in particular, that is a beneficial situation. Sam: Glenn and I have had this debate at the Deloitte program because he talks about how great mentorship was and I had said To heck with mentors, get out there and do it on your own. I was an officer in the Marine Corp. rising to captain, and at the time there were 20 black officers. Did I say I needed a black officer to be a mentor for me? Heck no!
Tax Diversity: So, philosophically that is a very interesting point. A lot of times, somebody s excuse for not having a bigger pool is this lack of role models yet those of you who have blazed the trail here, none have actually had a role model influence. Do you think though that if we took a statistic of the population you are a bigger anomaly than the norm out there; that there are more people out there that need the comfort and support of role models to enter the field and elevate themselves? Sam: I have never really thought about that. I really just think that there is too much emphasis on role models. I remember when I was at a law firm and there were two black partners there, one was Wayne McCoy and the other was myself. We raised some funds for Howard Washington and for the first time we got bond business from the city of Chicago. We had done bond work for other municipalities in Illinois but never for the City of Chicago. The deal we were working on was quite complex. Wayne was doing the corporate bond work and I was doing the tax work on it. Wayne got one of our black associates involved in the matter. Now, we had a very important meeting coming up on Monday and we were going to work straight through the weekend. This guy had plans to go out of town with his wife and said Sorry guys I won t be here. This guy had all the mentors in the world. Wayne was so darn frustrated he just told him to go. You have to have some initiative, that s where it starts; with enthusiasm for what you are doing. If you don t have that, all the mentors in the world aren t going to be able to do anything for you. Tax Diversity: Which is where you come back to the issue that, yes they have to be positive, they have to love what they are doing, and that initiative and responsiveness that you talked about that Clary has and clearly Glenn has, is color blind. You either have it or you don t. Very Interesting. If you were advising a student, a diversity candidate, about coming into the tax field, what would be your advice to them? Would it be to simply forget about all the other issues and to just focus on the three elements we just described? Sam: Yes. Any minority who has a talent for tax and has taken a couple tax courses in law school and has done well in some related courses, like corporations. In my experience any minority student who has done well in school will be able to get a good job. Tax Diversity: So the climate is conducive Sam: And the reason they are going to have a good job is because of the conversation we are having today; because people would be interested in having someone like that. They aren t going to bring in people to do taxes if they don t have an interest or a talent for it, because that would be the equivalent of engaging in malpractice. Tax Diversity: So the playing field is asset up to the point where, if you have the interest, talent, and are willing to take the initiative, and you love what you think tax will offer you, then you have a great opportunity to come in and jump in. Sam: Yes, I think that s it! I think that the idea that this isn t happening because of discriminatory barriers is invalid. Tax Diversity: I think we just need to get more candidates of diversity involved for the right reasons.
Sam: I think that s right! I know this might be a bit of a stretch but just take a look at Barack Obama and you see a guy who is focused on the future and not focused on the past. This is a guy who is very, very positive. He is saying I can do it, I can get the biggest, most difficult job in the world and people aren t going to discriminate against me. Tax Diversity: Right. They want the person who is confident in their own abilities to start with. Sam: That s right. Who is his mentor? And if that guy can run for president, then a student who is interested in becoming a tax lawyer can go to class and do well. I mean they have to have the talent, interest and the diligence. You put the talent, the interest, and the diligence together and they ll see some success in the end. But if Barrack can do what he is doing by being forward thinking then somebody who is interested in tax can get themselves a really nice career in tax by being forward thinking. Tax Diversity: Excellent, This has been refreshing, a little different perspective, but logical.