Why Is a Contract Review A Must?
One of the aspects of a doctor’s life that is amazing to watch is how they go through so many years of training…learning, developing, trying to get up to speed in their specialty, doing all of this so that they are ready to start their career. They get to the end of those years, and, like a baby bird gets pushed out of the nest to learn how to fly, so doctors get pushed out with little to no training in how to find the right job, sell themselves in an interview, review a contract, negotiate legal terms and set up a financial plan that will set them on a track to financial independence one day.
This lack of business knowledge makes doctors very susceptible to mistakes that have big consequences. Let me give you an example.
We had a urologist contact us for some help with his employer situation. He had been there about two years making a base of $180k, and had fully anticipated he would have been offered partnership by then which was why he took the risk of a lower compensation package. Discussions would happen, the partners would have meetings to discuss his candidacy for partnership and routinely they would make excuses and delay the decision. This went on for some time so that he finally had enough and started to look for other places to go. The contract he signed with them was not reviewed by a qualified employment attorney and he didn’t really negotiate anything so there were restrictions that would make it difficult for him to stay in the area. That’s when he realized he needed to get help. He learned the hard way from this first contract that the only way to protect himself in the future is to address key terms in the contract before he signed at the beginning.
During this time he was discussing things over with his wife and they decided to pursue an opening near her family so that their kids could be close to their grandparents. While interviewing with one group he was asked, “what would it take financially to get you to come here?” His frame of reference was his current job which he was well underpaid compared to the market so he responded with “250k is the minimum.” How do you think the employer responded? He got exactly what he asked for.
It was at this point he contacted us. He needed help exiting his current contract and also reviewing the new offer. Within our first meeting we learned about his situation and were able to see that he was in a really bad shape. He hadn’t done enough fact finding about the group he joined to learn about the future, he didn’t have the contract reviewed, and tied his own hands behind his back by not negotiating much of anything for fear of a negative reaction and a naïve thought process of “they wouldn’t treat me any differently than the other doctors in the group, right?”
Once we got into his expectations for compensation and we knew he was heading down the wrong path. We showed him what was the going rate for a urologist coming straight out of training vs one with the experience he had. He was happy to hear that his compensation should be about double, but was equally disappointed after he low balled himself at 250k. From there he opened up his search and was able to find several other options and ultimately landed on the one. He was up and running at triple the income level he would have taken living near the in laws. Since then he’s been able to make huge financial progress and has been fortunate to make some unique investments. And of course most importantly his wife is very pleased with where they ended up.
It is baffling how underserved doctors are in their business acumen.
We understand that for residencies and fellowships it’s hard for their curriculum to incorporate real life examples to address these issues.
These pitfalls happen every day.
Going into the job search with more intel behind you, a financial advisor who specializes in your compensation, an attorney who daily is representing your specialty for your area and your type of practice, can prevent you from wasting time, getting underpaid, having to relocate, and start over again.