Medicine is business. Like most business transactions, the basis of a good medical agreement is a mutually beneficial partnership.  Even the most straightforward employment agreement should be conveyed in a written contract.

A contract is a legally binding, written agreement that clearly identifies the relationship of the parties involved for liability, financial, and other purposes.  It is an opportunity to spell out every detail and provision of your work relationship.  Although some of the provisions may never be utilized, you want to understand all of them and how they impact your relationship with your employer. Poorly negotiated contracts could cost you thousands or even millions of dollars in earnings over the course of your career.  This could be the time you negotiate compensation and issues such as partnership, moonlighting, or termination before you establish your relationship and while both parties are happy.

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

Contract Topics

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

• Start Date of Contract
  
  We recommend that our clients request a contract start date that is two weeks beyond the date they anticipate being ready to start.  This strategy will give the physician a cushion to ensure that the employer receives all licensing paperwork on time.  The extra time also allows residents to take a short break before embarking on their careers.  Every resident can benefit from the extra time to relax and rejuvenate before beginning his or her career.

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

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

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

• Non-Compete/Restrictive Covenant
  
  A non-compete clause or restrictive covenant is a section of the employment contract that prohibits a physician from practicing in certain areas for a certain period of time after a termination.  Clearly such a clause is not in the physician's best interest.  Most employers will include such a clause, so we recommend that our clients negotiate for a clause that is the least restrictive.  Study the non-compete or restrictive covenant carefully as it could limit where you will be permitted to practice.

  Physicians should angle for clauses that limit the restriction to ONE primary office within a five mile radius in very specific language.

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

Contract Negotiation Steps

Negotiating an employment contract requires a plan.  Always enlist the assistance of a professional advisor before beginning contract negotiations.  The following steps can help physicians initiate a successful contract negotiation plan:

Develop a strategy.  Review the proposed contract draft.  Do not comment to the employer about the proposed contract. Review the employment agreement with your contract review professional.  Formulate an email response to the proposed contract draft.  Meet with the employer in person.  Email positive or negative responses to the employer's proposed contract.  Continue the review and negotiation process.  Finalize the contract.  Give a copy to your advisor 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.