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Physician Contract Negotation

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  • TravisRADMD
    replied
    Decided to negotiate the pre-term sheet on my own and just have the contract reviewed only by an attorney. Thank you all.

    Leave a comment:


  • Tim
    replied
    @Vagabond MD,
    “There is very little room for negotiation and none that could not be handled by email or a phone call between our senior partner and the candidate.”

    I would venture a guess, the nature of the partnership agreement and the compensation philosophy was at least mentioned before sending a LOI.

    Leave a comment:


  • Dusn
    replied




    We hire people to become our partners, not to screw them over.
    Click to expand...


    I think, in many medical fields, that sentiment has changed....  But a contract negotiator still won't help.

    Leave a comment:


  • nephron
    replied
    I agree with everyone saying that you should do the negotiating yourself.   You should hire someone to review the legal terms of the contract and explain to you what they mean and maybe suggest changes if changes need to be made.   I wouldn't pay more then 1-2K for it though.  My last contract attorney charged me 250 per hour, spent about 5-6 hrs reviewing the contract with me, got almost nothing changed in my contract.  If you get the sense that your employer isn't too willing to change very much and you are probably going to take the job anyways, I wouldn't spend too much on it.   A good contract doesn't protect you against a bad employer and a bad contract doesn't always mean that you have a bad employer either.   I think that even when employers violate their written contract, when push comes to shove, most of us employees don't go through the trouble and cost of trying to enforce it, you usually just leave and find a new job.

    Leave a comment:


  • fatlittlepig
    replied
    Fatlittlepig isn’t an administrator or a hiring manager but let’s say... hey Dr. fatlittlepig, so and so is on the line, he is the hired negotiator for that candidate we interviewed last week.

    Hmm... um okay so this physician we want to hire either can’t speak for himself, is too timid to speak for himself, is too scared to speak for themselves, or is so malignant that they want to hide their demands behind someone else. Well in that case fatlittlepig will just go in a different direction so to speak.

    Leave a comment:


  • VagabondMD
    replied
    We hire people to become our partners, not to screw them over. People in our practice, by and large, all have the same deal. There is very little room for negotiation and none that could not be handled by email or a phone call between our senior partner and the candidate.

    I would be concerned that when you hire the $2700 negotiator, he/she will have to demonstrate that he/she earned or saved you multiples of that to justify the cost.

    As a senior partner, I will respond in one of two ways:
    1. Pulling the offer, if I have another candidate.
    2. Holding back other purely discretionary financial benefits that you might get down the road that you do not even know about, like early partnership or unexpected bonuses, because now I feel that I have to win back multiples of the multiples of the $2700 that you paid the negotiator.

    Leave a comment:


  • Tim
    replied
    “You’ll have conversations about how aggressive you want the negotiations to be and what you’ll be willing to sacrifice to get a concession. Negotiations are part of the game in any contract and they are to be expected.”

    One technique is to have the discussion and preferences discussed.
    • A letter to you with suggested modifications
    • A draft of a letter from you to the employer with the suggested modifications. You edit and phrase how you are comfortable.

    The result is points of each request are phrased as areas of discussion. Most likely a return phone call with the intent of resisting or lowering your requests. In that conversation it will become clear, base comp is reasonable request, incentive pay has valid reasons, CME related to actual planned involvement etc.
    You are simply discussing facts and looking at the total package with flexibility. The policies of the hiring organization have flexibility in some, and not in others.
    Anecdotally, the HR called back and after pleasantries seemed to imply the base compensation was way out of line. But, hearing MGMA numbers and competitive offers decided to do a little more homework. The counter offer came back with close to a 50% increase in base and an added incentive that greatly upped the annual compensation. The review helped craft a request that was reasonable and supported but left the HR rep the flexibility to package it within the organization. Common goal.
    Compensation, location and job. The contract was declined, but not because of contract/compensation issues. Each organization has some points of flexibility, the goal is to find a mutual level of comfort. Sound reasonable discussions are the only way to turn levels of discomfort into agreements. Maybe they can’t afford you, that’s not your problem. You may choose to sacrifice for the location and job. One should be comfortable discussing a list of items that are part of your compensation and contract at the appropriate times. Negotiations definitely are the appropriate times.
    Think about it, they have a need to make you comfortable as well.

    Leave a comment:


  • jfoxcpacfp
    replied


    “Do you really think all contracts are black and white?” Nice try putting words in my mouth. No, I don’t think all contracts are black and white. But I don’t think most physicians get any value out of paying for ‘contract review service’.
    Click to expand...


    Those weren't your words, they were my question. Point is that you simply provided very anecdotal evidence to buttress your opinion.


    “Or that firms that specialize in this area would stay in business if physicians typically had the experience you describe above?” Edward Jones and Northwestern Mutual stay in business selling unnecessary, overpriced products to physicians and others. Just because someone isn’t savvy enough to realize they’re paying for something they don’t need doesn’t mean there aren’t businesses out there that will play on their ignorance. Right?
    Click to expand...


    Anecdotal evidence again. And over-generalization of 2 firms that are vilified on this site, easy shots. As many anecdotal opinions to the contrary as you can dredge up, you could find just as many evidencing the need for contract review and examples of mistakes doctors have made by trying to save $650 by DIYing them. If you were interested in looking, of course. I think there is a lot more at stake than risking $650 by taking on a DIY review of a legal document unless you have a lot of experience in that area - and sometimes even then.

    Why deride a forum reader for paying for what may very well be helpful advice? While your opinion may be appropriate for some, it could be very costly for others. I find it bothersome when (hopefully experienced and older) physicians blithely tell newbies to just "DIY", not knowing the context of the situation. Each one is unique.

    That said, I am not in favor of hiring an outside firm to negotiate a contract except in very special circumstances, nor have I voiced that opinion in this thread.

    Leave a comment:


  • HandFellow
    replied
    It's ridiculous to think that your attorney is going to go in guns blazing and offend everyone she talks to.  You'll have conversations about how aggressive you want the negotiations to be and what you'll be willing to sacrifice to get a concession.  Negotiations are part of the game in any contract and they are to be expected.

    I am the absolute worst negotiator I know.  I give in way too fast the second I sense that the other party is uncomfortable or if I am uncomfortable, so i would much rather have someone else be in that position for me.  I think that is the role of using the attorney.

    As I said earlier, I would hire out the contract review portion first and then make the decision later about negotiations.

    Leave a comment:


  • HandFellow
    replied
    I found my contract review attorney very useful.  There are contract terms and sections that just aren't that straightforward.  My wife is an attorney and when she reviewed my contract (for no charge!) there were questions she had about both meaning of the contract and how normal the language was.  You don't know what is regular contract language and what language is being used to take advantage of you.

    I definitely didn't use an attorney to review my initial offer.  At that point you are just agreeing to general terms and everything can be changed.  Once you get a real contract, if you feel like you understand it all and you like everything in it, don't use an attorney.  Certainly you can just ask the company what the contract means, but I found even when I did that, I didn't fully understand what they were saying.

    What I would do is get someone that will review the contract for you without buying the negotiating part yet.  They should go through the contract line by line and tell you what is normal and fair and what isn't.  At that point, if you want to ask for changes yourself, you can do so.

    If there are significant items that you want to negotiate either you can do it or you can ask the attorney to do it.  If you are negotiating with a small firm, I probably wouldn't use a third party to negotiate.  However, if it is a bigger hospital or hospital system, an attorney can be very valuable. For example, my attorney asked for the contract to include a section that would pay 5k toward professional fees, such as me getting a CPA set up and her attorney fee.  I never would have thought of that.

    Leave a comment:


  • Tim
    replied
    • Paid advisor’s have a purpose. If used properly one gets benefit at a reasonable price. CD provides compensation data and experience in analyzing a specific contract. Familiarity with terms and conditions for a particular specialty and employer give one information at a very low price.
    • CD does not provide legal services or advice. One is relying on the experience factor. The benefits are that the unusual or restrictive items can be pointed out and avoided. A standard or normal contract with reasonable terms, CD will simply suggest modest requests in your favor, this is simply the result of any service.
    • Knowing areas of flexibility can easily pay for itself. One can’t simply submit a request for 17 separate items.
    There may actually be 17 changes needed. Some are compensation and some are work.
    Particularly the first contract. One can think of it as a translator. Most physicians can learn quickly, but it prevents mistakes and speeds the learning curve in translating your services into cash and job satisfaction. Probably well worth the price if nothing other than time savings.

    Leave a comment:


  • EntrepreneurMD
    replied
    Interesting. I likely will need to consider hiring another physician within the next year or two. Paying close attention to these threads.

    Each circumstance is going to be different. Is the offer already a good one? Is this a small or large employer? Does the potential employer even have much flexibility with negotiations? Are you applying in an area where there is a large supply vs. demand for your specialty or not? - speaking to how much leverage you may or may not have. Does your potential negotiator understand your market and both sides, or run the risk of ruining the offer? Does your negotiator understand your priorities and if you can't get something does he know where to steer next - ie. salary and bonuses, partnership track, vacation time, work load, benefits, sign on bonus, 401(k) match and vesting schedule. A lot of things need to be considered.

    Ultimately, it comes down to a fair balance between employer and employee. The employer takes on risk too, more risk for a smaller potential employer. It's going to come down to how much you value this practice and how much they value the impression you made on them. You may (or may not) be looking at multiple offers, and they are/have been likely looking at multiple potential hires for the position.

    Interview the negotiation firms before you hire. You could initiate the negotiation yourself to get a feel for what the potential employer is willing to do for you then decide if there's a need to hire a firm and what the cost/reward/risk ratio may be. If it's a big employer with a rigid contract and multiple applicants, there may not be a point to hiring a negotiation firm. It's more of a yes/no acceptance of the terms at that point. If a potential employer seems very interested in you and seems to be on good financial ground, the negotiation firm may be worth your while.

    I personally don't believe most employers like the idea of negotiating with a third party and it may be a turn off. Can you hire the third party to give you advice in the back and forth negotiations while you have the discussions yourself? Then they're more just an advisor to you, not a negotiator with the potential employer. That may be better. Your impression and goodwill is a valuable asset here, take care not to compromise that especially if YOU want this job. If you have other good options and are willing to walk away you may have more leverage, that's why every circumstance may be different and there is not going to be any one right answer.

    Best of luck to you!

    Leave a comment:


  • fatlittlepig
    replied
    Needing a third party to communicate or negotiate with a potential employer seems kind of lame. That would turn me off if I were the employer.

    Leave a comment:


  • ZZZ
    replied
    @jfox

    "Do you really think all contracts are black and white?" Nice try putting words in my mouth. No, I don't think all contracts are black and white. But I don't think most physicians get any value out of paying for 'contract review service'.

    "Or that firms that specialize in this area would stay in business if physicians typically had the experience you describe above?" Edward Jones and Northwestern Mutual stay in business selling unnecessary, overpriced products to physicians and others. Just because someone isn't savvy enough to realize they're paying for something they don't need doesn't mean there aren't businesses out there that will play on their ignorance. Right?

    Leave a comment:


  • Michael Scarn
    replied
    I would just pay a little extra to have the pre-contract term sheet reviewed by contract diagnostics. This is what I did, and it worked out well. In my experience having just gone through the process, much of the negotiation was on the terms included on the term sheet. Once we got past this point, it was mainly formality. I would not consider having someone negotiate on my behalf.

    Leave a comment:

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