Medicine is business. Like most business transactions, the basisof a good medical agreement is a mutually beneficialpartnership.  Even the most straightforward employmentagreement should be conveyed in a written contract.

A contract is a legally binding, written agreement that clearlyidentifies the relationship of the parties involved for liability,financial, and other purposes.  It is an opportunity to spellout every detail and provision of your work relationship. Although some of the provisions may never be utilized, you want tounderstand all of them and how they impact your relationship withyour employer. Poorly negotiated contracts could cost you thousandsor even millions of dollars in earnings over the course of yourcareer.  This could be the time you negotiatecompensation and issues such as partnership, moonlighting, ortermination before you establish your relationship and while bothparties are happy.

We highly recommend that our clients hire a professionalcontract  reviewer to help with the process before beginningnegotiations with any prospective employer.  Reiman Financial,LLC can help you with your contract review.  Ensure thatyou get the best contract possible:  Contact us now to schedule your complimentarycontract consultation.

Contract Topics

When physicians receive the first draft of a proposed contract,they should check that the following terms to make sure theycomplement their situations and goals:

• Start Date of Contract
  
  We recommend that our clients request a contract start date that istwo weeks beyond the date they anticipate being ready tostart.  This strategy will give the physician a cushion toensure that the employer receives all licensing paperwork ontime.  The extra time also allows residents to take a shortbreak before embarking on their careers.  Every resident canbenefit from the extra time to relax and rejuvenate beforebeginning his or her career.

• Term of Contract
  
  Most contracts cover one or two years. We typically advise ourclients to negotiate for a two-year term.  This allows them tolock into the terms of the contract if medicine or the groupchanges.  We also encourage our clients to tie the income ofthe contract to the road to partnership.

• Physician's Duties
  
  Physicians should not be a surprise on the job.  Everyduty and responsibility that is expected should be stated in thissection of the contract.  This section may also indicate whichduties are specifically excluded.  Call coverage, hiring andfiring responsibilities, administrative duties and other types ofduties may be included in this section.

• Confidentiality/Trade Secrets
  
  Physicians should not discuss the terms of their contract with anyother party besides their professional contract advisors.Discussing the terms of your contract can lead totermination.  A physician's salary, bonus, and duties shouldbe considered confidential information and guarded as such.

• Non-Compete/Restrictive Covenant
  
  A non-compete clause or restrictive covenant is a section of theemployment contract that prohibits a physician from practicing incertain areas for a certain period of time after atermination.  Clearly such a clause is not in the physician'sbest interest.  Most employers will include such a clause, sowe recommend that our clients negotiate for a clause that is theleast restrictive.  Study the non-compete or restrictivecovenant carefully as it could limit where you will be permitted topractice.

  Physicians should angle for clauses that limit the restrictionto ONE primary office within a five mile radius in very specificlanguage.

• Other topics to consider
  
  Salary Structure
  Benefits
  Tail Coverage
  Partnership Buy-in
  Buy-Out Provisions
  Moonlighting
  

Contract NegotiationSteps

Negotiating an employment contract requires a plan.  Alwaysenlist the assistance of a professional advisor before beginningcontract negotiations.  The following steps can helpphysicians initiate a successful contract negotiation plan:

Develop a strategy.  Review the proposed contract draft. Do not comment to the employer about the proposedcontract. Review the employment agreement with your contractreview professional.  Formulate an email response to theproposed contract draft.  Meet with the employer in person. Email positive or negative responses to the employer'sproposed contract.  Continue the review and negotiationprocess.  Finalize the contract.  Give a copy to youradvisor for safekeeping. 

Contact Reiman Financial,LLC for a complimentary employment contract consultation.

PAS and the representative do not provide legal or tax advice or services.