At-Will Contracts Put Your Career at Risk
Physician contracts are special. When there is a termination you can lose a lot more than a job.
The Good, The Bad & The Ugly of Physician Contracts
A physician contract lawyer reviews medical contracts from two perspectives.
First there is the Kumbaya review which assumes that everyone starts as friends and ends feeling like family. Then there is the Darth Vader scenario where the physician joins the group and learns that he has gone to the dark side. A professional contract review will preserve the Kumbaya opportunities but untangle the gordian knot that can embroil you in painful future litigation.
Physicians are Potentially Vulnerable When Jobs Terminate
What would be a simple job change or separation for most people can become a career threatening disaster to a physician. A firing “for cause” may have benefits for the medical group or arise from spite due to professional conflicts. For the less powerful physician (being fired), the termination could lead to medical board reporting or required disclosure when credentialing.
Physician Contract Review Requires Playing Out Social Scenarios in the Context of Your Contract
Physician contract review takes into account life changes, personalities and the soft unknowns that give life to contract provisions. Our contract review includes the “what if” scenario. For example, “what if” a partner wants to take over your end of the practice and not pay you. What moves does this contract put in place that would make that possible ?
Disputes over future competition and restrictive covenants can make you unemployable as new employers choose to avoid “hiring a lawsuit”.
Even winning a lawsuit can drain your emotional, intellectual and financial resources at a time when you would prefer to devote yourself to your family and your practice.
Self Review is Like Having a Patient Read Her Own MRI
There are patients who are really smart and after going on the internet might do pretty well reviewing their own MRI. Self review of the contracts is similar but perhaps not quite as extreme. But the similarity is this. You can do a good job in many instances …. but … what you miss might hurt you ten years from now.
The need for a medical contract attorney is not an insult to your intelligence.
It simply a fact that there is a benefit to time and experience in a specialized area. This is particularly true as the other side is using attorneys who specialize in writing contracts. These firms write contracts that appear balanced but (often) are unbalanced. Unless you have seen those hidden moves play out at trial, it is hard to fully see them when you review a contract. For this reason every contract that we review has as lead counsel an attorney who has litigated to verdict, a physician contract lawsuit.
Physician Employment Contracts Have Their Own Complexities
A physician contract review lawyer understands the complex interaction between by-laws, shareholder agreements, employment agreements, state law and pending state legislation. This interplay creates a single agreement composed of many interrelated parts. Which parts control over other parts ? Which parts can be changed by a vote of shareholders ?
It is important to understand those rules and the possible factual scenarios to which these rules and provisions apply. A contract which might be fair to one physician (at one stage of that physician’s career), might be unacceptable for you.
Consider also how many hours you have to work, not just on the paper (electronic ?) contract but in reality. (Read this Medpage Today Article on which Specialties earn the most per HOUR) We consider all factors in assessing and negotiating your medical employment contract (and related documents).
Potential Battleground Issues
Our contract negotiation lawyers regularly confront certain battleground issues. Here are just a few.
What is intellectual property ? Does it include ideas ? Does it include ideas that your family brings to you but you then provide input in response ?
What is personal goodwill ? Does the group decide whether they keep it or sell it back to you ?
What is corporate or medical group goodwill ? If your uncompensated hard work and reputation have built the group’s goodwill, do you get paid for it when you leave ? If so, how is it calculated ?
Are you an “Employee”, “Shareholder Employee” or “Independent Contractor” ? (And who benefits from the differing designations?)
Tax Issues – Is a student loan repayment taxable ? Are partnership distributions taxed differently than salary ? If you leave how is goodwill valued and taxed ? What can you write off on your taxes that are related to the business ? In a small practice how legitimate is it to hire family, children and relatives ?
It is Normal to Negotiate a Physician Contract
Excuses that I often hear not to negotiate ….
“I don’t want to alienate my new partners !”
“I know these people. They’re good people. It will be fine !”
“It’s a standard contract, they all signed it !”
When I was younger a friend who was a Hollywood producer told me that you can negotiate at any store (and he did all the time). I wanted a couch at Restoration Hardware so doubtful as I was, I put his claim to the test. I told the salesperson I would buy the couch but at 20% less than the selling price. She told me she would check with the manager and call me later that day. About an hour later, I had my deal. These techniques are well publicized. A fantastic book on the subject is Herb Cohen’s best selling book “You Can Negotiate Anything”. But somehow, when it comes to physician’s contracts many doctors are uncomfortable negotiating anything but the basics. Salary, vacation, job duties are all comfort zone negotiation points but a contract is a living thing. It becomes your boss, your employer, your talisman for your future. It should all be looked at and negotiated in a mutually acceptable manner. Remember that some back and forth at the start can allow you to often avoid a protracted and painful legal war in the future.
Finally for those who have no problem negotiating, our experience teamed with your entrepreneurial spirit will yield the best results.