By: Bruce Bryen
As a dental school graduate looking for an opportunity to begin work as an associate dentist is one of the most important matters as you search for the best job available.
That job would offer the best compensation package, benefits, and potentially a timeline for the acquisition of the dental practice for whom you will shortly be working.
Benefits of Having an Associate as Part of an Exit Strategy
The owner of the dental practice knows that an exit strategy for themself is a critical long-term factor that must be addressed.
Having an associate who will be part of the owner’s exit strategy is a well-thought-out plan that will insure continuity for the patients as well as the employees.
1. Allows Time for Training
It will allow the owner a reasonable time frame to train the associate so that they will be familiar with the owner’s methods.
2. No Brokerage Fee Cost
It will address the cost of the brokerage fee that will not have to be paid to a dental practice broker for finding a future partner. Those funds can be used to enhance the practice value while the associate is being trained.
Negotiate a Minority Interest in Your Contract
The particular owner and dental practice that the associate has aspirations of joining may or may not be interested in a long-term plan. It may pay for the associate to keep looking for an opportunity to be built into the associate contract that is being negotiated.
It may be that an owner is ready to offer the acquisition of a minority interest in his or her dental practice immediately.
Sometimes an opportunity arises when an associate has the ability to present themself in a manner that projects maturity, a decent skill set of clinical expertise, and the personality that will attract new patients.
If the owner feels this future associate can be the right fit, they may not want to wait until time has passed and will offer the acquisition of a minority interest in the dental practice now or in the future with a specific date listed in the contract that is being discussed.
Have a Full Understanding of Your Contract
The graduate may be excited about the offer and may not want to pass up the opportunity to be a partner at a specified time.
It’s really important for the graduate to understand what it means to own a minority interest in a dental practice.
What does the minority shareholder get in terms of a voice in the management of the practice?
Will the minority shareholder have to right to acquire the balance of the partnership interest so that he or she can become the 100% owner at a specific point in time that would be so noted in the contract now?
The dental practice management agreement is so important because it reflects the terms and conditions of whom is running the dental practice, for how long, and what the minority partner’s rights are.
Have Everything Being Agreed Upon in Writing
Everything being agreed upon between the owner and the dental associate to be a minority shareholder should be in the contract in writing so that there is no misunderstanding as to what will occur in the future.
There are always plenty of dentists who own dental practices to offer a future interest in a partnership without putting the terms and conditions of their verbal offer into the contract in writing.
Since none of the agreed-upon terms have been memorialized in the written contract, a common phrase about the verbal promises is that they are not worth the paper they are written on since they really have not been put in writing so they don’t exist.
If a promise is made and it is not in the final contract available before its execution, it does not exist and the associate should get ready to run from the offer and look somewhere else for a job plus the potential of long-term ownership.
Listen To Knowledgeable Advisors
Listen to the advisors but only if they have experience with dental practices.
The graduate has probably seen and heard enough during his or her interviews, job searching, and speaking with peers to have a good understanding of what can be done and what cooperation is available between an owner and an associate.
He or she has seen friends and recent fellow graduates secure jobs that are good paying and offer a long-term future for the friend.
Since the graduate that is still pursuing a job and is the main character in this story, it is reasonable for him or her to ask “If my friends got what they did in their contract, why shouldn’t I?”
It’s important to know how long the friends hunted for the job that they acquired and what the terms and conditions in the friend’s contract are.
Sometimes there are extreme exaggerations in discussions and without seeing the contract of the friend, the graduate really does not know what the friend achieved in his or her contract discussions.
Never Give Up on the Best Opportunity
Whatever the decision and however long it takes to secure the opportunity that the graduate wants to achieve, with his or her education and the number of dental practices available, the graduate should not give up.
With the DSOs entering the bidding process, that insures more opportunities for the graduate to find employment with the terms and conditions that he or she desires in the contract.
There always must be a compromise but that means that each side is giving in on something and also achieving something.
Don’t forget to compromise as long as the owner is being reasonable but stick to being reasonable in the quest for the goal being looked upon for achievement.
Photo by Andrea Piacquadio