Xanathar's text is just a ruling guideline, not a core rule
So, the work around is just house-rule different than the optional rule provided in XGtE.
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And being honest, I believe this is a bad ruling guideline. Using your entire reaction to simply identify a spell seems... too much. "Oh hey I will use my reaction to see what spell they are casting" - "Oh, a Fireball". Fire explodes. Yeah, that was obvious...
Except for identifying long-lasting effects, that's pretty much useless.
Crawford, the lead developer for 5e, has made a tweet stating his own ruling here1:
As DM, I let you ID a spell if you know it (or it's on your class's spell list) and if you perceive V, S, or M. #DnD
I use this along the Arcana check described in XGtE.
the character can make an Intelligence (Arcana) check
with the reaction or action. The DC equals 15 + the spell's level.
The ruling is basically: if you know the spell or have it prepared, you automatically succeed on knowing that the spell is being cast (although note: you don't know what level the spell is being cast as, so that may still trick your counter spell). If you can learn or prepare that spell (i.e., it is in your class list), you can try the check (without spending a reaction). If it's on your class list, but you can not learn it (i.e., it's a higher level than you have spell slots for), I simply tell them the spell is too advanced for them to understand (so at least they know the spell is going to hit hard haha).
A few reasons I do it:
- It's frustrating for the players to use counterspell on Create Water1 or another "whatever" spell.
- I feel like Spellcasters should be able to recognize a spell an enemy is casting, especially if it's a spell they themselves know and use frequently. This is based on the assumption that the verbal and somatic components are somewhat universal (unlike, for example, the way a Wizard writes the spell in the spellbook, which is unique to the Wizard). I'm not sure this is explicitly stated anywhere in the core books, but that's how I interpret it, and many spells actually described what are their components, so it's fair to assume they are standard.
- Spellcasting NPCs are not exactly the most common enemies the parties will face in my campaigns anyway.
- I find that it is hard, for me, as the DM, to be fair about "ah but the NPC doesn't know the spell the PC is casting either". The player literally just screamed the name of the spell and its description in my face, it's hard to simply ignore that knowledge when making the decision "should the NPC counterspell or not?" - so simply allowing them to know makes my life way easier and the game more fair. You (as a DM) or your DM may not have this problem - I do.
Honestly, I have even simply stated - sometimes unintentionally - "The Night Hag is casting Lightning Bolt", i.e., spelling out what is the spell to the players. So far, I didn't really have a problem with this ruling.
If you are not the DM, ask the DM to allow you to do that.
1 This tweet was pre-XGtE, but the point is that there are other ways to rule how identifying a spell works other than the one that was ultimately published as optional rule.
2 The example is obviously a joke, before anyone tells me "why is the NPC casting create water mid-combat?" or anything like that.