Common Misconceptions about Contract Review
What You Might Not Know About Your Contract
“I think the contract is mostly good – I just want you to focus on the non-compete clause and tail coverage.”
We hear this frequently from our physician-clients. When we dig deeper with our clients, we find the following things to be true most of the time.
The physician is discounting the importance of other contractual terms.
Non-compete clauses and tail coverage are important, but so are other contractual terms. Is the compensation too low? Should there be a signing bonus, moving-expense bonus and/or productivity bonus and are these subject to repayment in certain situations? Does the contract limit call frequency and/or the multiple locations where the physician might work? Can the physician terminate “without cause” from day one, or must s/he wait a certain period of time? If a private practice, is there partnership potential and if so, is there a buy-in and how much? These and other contractual terms potentially can affect the physician in much farther-reaching ways. While tail coverage sometimes can cost just a few thousand dollars, these other topics can translate into much more value, depending upon how they are negotiated.
The physician is hesitant to negotiate the terms of the contract
The physician might really be saying “I don’t want to push back on too many contractual provisions, because I don’t want the employer to get angry, or revoke the offer!” Of course, a physician potentially can make a “list of demands” that gets too long. But most employers are willing to discuss more than two! Trained professionals help by reviewing the terms of the contract, but also by engaging in a little “Negotiating 101” in which clients are advised on which and how many contract modifications to ask for.
The physician is merely regurgitating the opinion of someone who is not professionally qualified to analyze an employment contract
Somewhere along the line, someone (a recruiter, an administrator at medical school, a family member) has told the physician that the non-compete and tail-coverage provisions are the most important contractual issues. That is not necessarily true – in fact it’s rarely true that a contract review will boil down to those two issues alone. Each different employment opportunity and each physician’s personal background and preferences dictate what is most important. Clients are best served when a professional reviews the contract, listens to the physician’s personal story and preferences, and then gives advice balancing those things together. Our professionals will help you focus on what is truly important for your contract, and give you the confidence to negotiate with the employer on those items.