I once met a guy who was an associate for over ten years. He had no idea when his partners were going to offer him a buy-in deal.
"There's nothing to worry about. That's perfectly normal."
Being an associate in a practice can be overwhelming. You’re still on a steep learning curve for improving your dental skills, you are being introduced to the business side of dentistry, and you’re trying to earn a living.
Along the way, you’re supposed to figure out where you want to practice for the rest of your life. Not an easy task. I’ve been an associate in a few offices before I opened my own practice. In addition to my experiences, I’ve heard countless stories from young dentists from across the country about the woes of associate jobs.
In a prior post, I discussed how to tell if your associate job is worth your time. Now I’d like to present my “Three Phases of Being an Associate.”
Don’t be the guy who associates for ten years without a plan. Some practice owners will dangle a carrot in front of your face and promise you the world. Many do not deliver on their promises. Protect yourself as an associate using these phases as a guide.
Phase 1: The Interview
I recommend you meet with your potential employer a few times before agreeing to work together. You are interviewing each other to make sure you have the same vision for yourself and practice philosophies.
The best way to meet a potential employer is to be referred through a trusted contact or to get to know them socially (e.g. dental society meeting). You’ll have a better sense of their character and integrity than if you just answered a newspaper advertisement.
Tour the office at least once. If you can, ask permission to hang out in the office while the owner is treating patients to get another perspective.
Is the practice insurance-based or fee-for-service or a mix? How does the practice generate new patients? Does the owner want to sell, bring in partner, or hire an employee dentist? How long does the owner plan to practice? What dentistry is done in the office and what is referred out to specialists?
Phase 2: The Trial (0-6 months)
During this first few months, it is not necessary to have a formal contract. I would also strongly urge you to not sign anything with a restrictive covenant. You’re just feeling each other out to see if you and the practice are a good match.
I would have a written agreement detailing your compensation for this trial period; that’s all.
How many days and what hours will you work? How are you paid? Do you have any administrative responsibilities? Are you required to build your own patient pool or are patients supplied to you?
Phase 3: Brass Tacks (6 months – 1 or 2 years)
Okay, the honeymoon is over. Now is the time to get down to brass tacks, as they say. You are about to invest a lot of time and energy into building this practice. You need to be clearer about how you are going to buy into the practice and what will be expected of you.
It is expected to have to sign a contract at this point. It may not be the final buy-in contract, but it will outline the projected timeline for the final buy-in contract. It may say something like:
“The owner and the associate will begin negotiations for a buy-in no later than May 1st, 2013. These discussion may begin earlier if both parties agree.”
List quantifiable goals for yourself to reach to consider you a successful addition to the practice. These goals can be based on production, patient satisfaction, new patients generated, staff satisfaction, etc.
At this point a restrictive covenant is not out of the question, from the owner’s point of view. If the owner is making a promise to you, you should make a promise to them in return. Consulting with an attorney may be prudent.
Any administrative responsibilities you take on should be documented. Are you managing the website? Did you join a networking group or start a study club to generate new patients? These are efforts on your part that increase the value of the practice. You must keep track of these efforts so that you don’t end up buying into a practice at a price that is higher due to your own sweat equity!
When will you be able to buy-in? What are your goals to be considered ready to buy-in? Are your practice philosophies still similar?
Again, these phases are not hard and fast rules; rather they are guides for your journey into practice ownership. Don’t forget to ask your fellow dentist friends for guidance along the way. If you don’t have dentist friends who can empathize, go to dental society meetings. The local, state and national levels of the American Dental Association offer countless opportunities for dentists to candidly discuss these matters.
Remember, protect yourself and avoid following the dangling carrot!