Contract negotiation is one the earliest hurdles that a new doctor must face before they can begin to practice medicine after at their first official job. Despite this, medical school and residencies often don’t equip physicians with a working knowledge of employment contracts. And many young doctors don’t feel comfortable negotiating when it comes to the business of medicine. Physicians may not be sure they can or should negotiate their initial employment contract. As a result, they may wind up with insufficient compensation and less than competitive contract terms.
Advice
The advice from financial advisors, hospital recruiters, and HR is the same: Don’t assume you can’t negotiate your first contract. While the amount of leeway in contracts will vary from situation to situation, it’s especially important for young doctors to broach the subject of contract negotiation. Many employers anticipate that young doctors won’t negotiate and use the opportunity to push through a boilerplate contract with unfavorable terms. It’s no secret that many doctors end up leaving their first position after only a few years. Many of the causes for these early departures can be prevented altogether by thorough contract review and negotiation.
It’s normal to negotiate
Negotiation is standard part of the hiring process for doctors at any point in their career. Sometimes employers may even say that they don’t negotiate employment contracts. However, it’s extremely rare to revoke an offer simply because a physician requests to negotiate. A doctor is perfectly within bounds to request fair contract modifications, and there is often room to find compromises amenable to both parties. Common negotiable terms include:
- Salary
- Educational Loan Forgiveness
- Call Hours
- Vacation Time
- Bonus
- Non-compete clauses
It’s one thing to know you should negotiate your first contract, and another entirely to put it into practice. There are several guidelines to keep in mind when you begin any contract negotiation.
Know what you deserve:
Before going into a negotiation, research the average physician compensation rate for your speciality in different geographic areas. Many new physicians make the mistake of quickly accepting an initial salary offer, because at first glance the pay seems so much more generous than a resident’s salary. However, later they may learn they are making 20-40% less than other doctors in similar positions. It’s also important to determine what is a reasonable scope for your specialty’s non-compete clause. This ensures that your ability to work is protected in the future.
Understand the details:
Don’t be afraid to ask for clarification or explanation if parts of the contract seem murky. It’s essential that you understand the details of a compensation package to determine if it’s feasible for you to achieve the potential full salary. Contracts that base compensation on high production and collections can disadvantage new physicians who don’t have an established practice. Specifics about workload, inflation riders, and termination policies may seem like contractual minutiae, but these details make all the difference once you start working.
Determine what’s on the table:
Listening is just as important as talking during a negotiation. Most organizations have certain terms that are set in stone, but throughout a negotiation you can find where there is room for compromise. For example, if an employer can’t budge on their rate of student loan repayment, suggest that they increase your signing bonus instead to help you pay back loans. By learning their priorities and communicating your own, it’s possible to find compromises that leave everyone satisfied.
There’s no need to go it alone.
Employers typically give job candidates a period of approximately 14 days to review a contract once they have made an offer. This prospect can be extremely intimidating for a new doctor who has likely never seen an employment contract before receiving their first job offer. For this exact reason, it’s advised that every doctor consults with an attorney and a financial advisor to review their employment contracts before beginning negotiation.
Physician-specific attorneys and financial advisors can work with you during the review period to go over the details of your contract. And compare it to industry and regional standards. A physician contract attorney can perform a legal review. And identify if certain contract terms leave you unfairly disadvantaged or whether beneficial provisions are absent.
Importance of Review
In addition, it’s recommended that a financial advisor reviews the compensation and benefits package of your contract. As complex compensation packages or hidden loopholes can seriously undermine a physician’s earnings. These professionals can help you better understand the contract you’re presented with, offer state-specific insight, and suggest specific revisions to bring up with your prospective employer.
Contract review services are a professional investment that can pay millions in dividends over the course of your employment. Attorneys and advisors who specialize in physician contracts can equip you with the insight you need to competently and confidently advocate for yourself during contract negotiations.
Related: How to Resolve a Physician Contract Dispute
Contract negotiation doesn’t have to be adversarial.
Many young physicians worry about coming off as greedy or difficult if they press too much for contract negotiation. However, blindly accepting a cookie-cutter contract doesn’t benefit either party if leads to frustration and miscommunication down the road.
To keep a contract negotiation positive, it’s important to develop rapport with your prospective employer about your career goals and priorities. Beyond the scope of one document. The more you and your employer understand each other and feel as if you share a common goal, the more likely you are to find solutions that satisfy both parties.
Of course, it’s important to remember that compromise goes both ways. Pick your battles and find opportunities to show the employer that you’re willing to meet in the middle. You likely won’t get everything you want. However, no employer should think less of you for asking for what you believe to be fair.
Warning Sign
And after all this, if an employer still responds negatively to your efforts to negotiate, it could be a warning sign. When an employer does not seem to value your priorities or take the time to establish trust and clarity in your initial contract, it doesn’t bode well for the future.
An employment contract is the foundation of the relationship between a doctor and their employer. If the contract is clear, specific, and reflects the priorities of both parties, it sets the stage for a long-lasting and mutually beneficial partnership. Conversely, if someone hurriedly signed a contract without proper explanation. Or only designed to benefit the employer, it can foster frustration, resentment and poor communication for the duration of a working relationship.
Final Thoughts
Contract negotiation is a key step in the hiring process for any new doctor. As well as a valuable opportunity to establish yourself as a fair, capable negotiator with impressive business acumen.
Physicians Thrive’s contract review specialists combine legal and financial expertise to ensure that they meet your interests during contract negotiations. Contact us now to learn more.
Don’t forget about income protection. Be sure to read our Disability Insurance for Physicians page.
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