Knowing How Hard To Negotiate Physician Employment Contracts
Physician employment agreements are not only legal documents, but they also set the stage for a physician financially and outline benefits like health insurance coverage
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Knowing How Hard To Negotiate Physician Employment Contracts
During medical training, physicians learn about medicine. They don’t learn how to analyze and negotiate employment contract terms.
Physician employment contracts are complex legal documents that have significant implications for employees. Physician contracts not only outline the terms of your employment, but they also designate base salary, bonus opportunities, benefits, and more.
That is why all physicians should consult with a lawyer and a compensation advisor as soon as they receive a new contract.
If you’re a new physician fresh out of training, you may be tempted to sign the contract without review so you can join a medical practice and start paying off those student loans. Even if you’re an employed physician, you might be eager to switch employers and forego contract negotiations.
This is a mistake.
If you sign a contract without a professional looking at it first, you may be stuck with restrictive covenants or other prohibitive terms that limit your earnings and employment opportunities.
Even after talking with an attorney and compensation advisor, there are still a few things you have to figure out.
- How do I know which changes or modifications to ask for?
- How do I communicate my thoughts to the employer?
- How do I ask for modifications while not coming across as too aggressive or putting the job offer at risk?
The complex nature of negotiation highlights another reason to engage with an attorney – the attorney can speak from experience and help you determine “how hard” to negotiate with the employer or even handle the negotiation completely.
This guide will walk through the negotiation process, why it’s essential, and next steps if you’re renewing a contract or negotiating a new deal.
How Physician Contract Negotiating Works
The first step of negotiating is the receipt of the contract. Before you make any change requests consult with your attorney.
It is better to send over change requests at one time as opposed to a series of calls and emails. If you ask for changes one at a time, you are not only limiting your bargaining potential. You could also come off as overly needy to your new employer.
When you review the contract with your attorney and compensation advisor, the goal is to determine which items are worth negotiating with your potential employer.
The answer is: all of them!
At this stage, virtually all employers are open to hearing questions and requests for changes. Employers are expecting you to come back with a counter offer, so use this opportunity to negotiate every part of the contract.
The only exception is if the physician already had extensive back-and-forth negotiation with the future employer. If that happens, the attorney is limited in how much more to negotiate. In this situation, pushing too much more could come across as too aggressive. This is why it’s vital for the physician to team up with an attorney as soon as possible. If your employer is expecting a quick turn around, delay signing until negotiation has taken place.
There is no need to rush the contract review process. There is a lot at stake and your options must be reviewed carefully.
Just because employers are open to hearing your terms doesn’t mean they will accept all (or any) of your requests. It simply means that virtually all employers are open to discussing anything at the start.
What’s the Worst that Could Happen?
When you present your ideal terms, the most significant risk is that the employer says “no.”
Since a simple “no” is the worst that can happen, don’t hold back. You’ll never get the salary range you’re dreaming of unless you ask for it.
Don’t be hesitant, shy, or afraid to ask questions or make requests for contract modification at this stage.
In our process, after the legal review and physician compensation/benefits analysis, when the employer is approached about making certain modifications, the employer will respond in one of three ways:
- The employer will accommodate all requests.
- The employer will not accommodate any requests.
- The employer will accommodate some requests but reject others.
Response #3 is the most common. This is a negotiation, after all. You should be expected to meet somewhere in the middle.
What about rejected terms? Should you push back after an initial rejection?
Certainly, pushing too hard at this later stage has the potential to damage the relationship with the employer. However, a skillful attorney can “read” the employer to see if there is any willingness to negotiate further, and if so, determine what leverage can be created on the physician’s behalf to do so.
What Happens if They Revoke The Employment Offer?
Some physicians are overly cautious during the negotiation stage because they are afraid the potential employer will rescind an offer.
Less than 1 percent of the time (according to the attorneys we work with), employers may react negatively to negotiation and revoke the offer.
This is highly unprofessional.
In our experience, when an offer is revoked, it is usually a sign that the employer may not be a good fit anyway. Who wants to work for an employer who’s not open to discussing contract details? This is usually the sign of an employer that is unbending, has poor communication in the workplace, and has unfriendly employment conditions.
If a potential employer is not open to hearing your terms, it’s probably time to move on. It’s better to discover negatives about the employer before signing the contract!
Why You Should Hire Professionals
Contract review is only part of the process in “closing” an employment offer. After inspection, the hard part starts: negotiation. As communication continues, it can become more delicate and more awkward.
Fortunately, skillful attorneys and compensation advisors can help navigate these waters with confidence.
Physician employment agreements are not only legal documents, but they also set the stage for a physician financially and outline benefits like health insurance coverage. Since so much is at stake, the contract review process should include both an attorney and a financial advisor, each of whom specializes in guiding doctors through the physician contract negotiation process.
When you work with Physicians Thrive, you receive a comprehensive evaluation of your employment opportunity, from both legal and financial perspectives, from a team that has reviewed contracts worth over $1 billion in the aggregate, in every state and in every specialty.
We uniquely tailor each physician partnership agreement to the particular business situation. In every partnership opportunity, there are several elements to be mindful of. We can walk you through the crucial steps to ensure your partnership opportunity is in your best interest.
Make sure you’re aware of what to look for in a partnership opportunity by contacting us at 877-744-9474 or by filling out the form below.