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Physician Contract Negotation

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  • Avatar TravisRADMD 
    Participant
    Status: Physician
    Posts: 14
    Joined: 08/24/2019

    Does anyone have experience using Dr. Dahle’s contraction negation firm recommendations? The guy who wrote the book, Dennis Hursh is charging a fixed rate(analysis & negotiation) of $2700 and Resolve is charging $650. Even Mr Hursh couldn’t explain the difference but I wonder if I would get better results with the personalized service of a smaller firm. Big price point difference though. Is his firm possibly 4X better? Also haven’t spoke with Mr. Appino at Contract Diagnostics yet.

    #242993 Reply
    Avatar ZZZ 
    Participant
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    Joined: 06/18/2018

    Just do it yourself

    #242994 Reply
    Liked by Vagabond MD
    Avatar TravisRADMD 
    Participant
    Status: Physician
    Posts: 14
    Joined: 08/24/2019

    That’s silly! A big point of the third party is to absorb all the potential animosity that might arise out of the negotiation process.

    #242999 Reply
    Avatar Tim 
    Participant
    Status: Accountant
    Posts: 3325
    Joined: 09/18/2018

    Much depends upon the services you personally need, the contract(s) being offered,the employer and other options you may have. A healthcare attorney that handles physician employment contracts may be a better fit. You need to decide which services fit the best.
    Avoiding a bad contract is probably the most valuable advice you could receive, but that is your choice. Not the advisor.
    I would suggest you use your advisor for advice, not direct negotiations. It is a skill you need to begin learning and can’t effectively delegate.

    #243000 Reply
    jfoxcpacfp jfoxcpacfp 
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    Status: Financial Advisor, Accountant, Small Business Owner
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    Joined: 01/09/2016

    For a contract worth hundreds of thousands of dollars, I believe it is worthwhile to pay for a contract review.

    Professional services are not commodities, though. When somebody is cutting your body open and they are cash only, are you willing to pay 4x more for a higher chance of success? The benefit of using a firm that charges 4x more depends upon the increase in value and higher chance of a successful outcome.

    If your contract is not overly complex (realize that is subjective) I do believe that using a contract firm with a high flat fee may be overkill. Back to the cutting example, hire the more expensive and experienced surgeon for complicated surgeries (I have no idea what those may be) rather than tonsillectomies. Hope I haven’t totally butchered my analogy.😎

    Johanna Fox Turner, CPA, CFP: I am not your financial advisor; any responses are for general purposes only
    http://www.fox-cpas.com/for-doctors-only ~ [email protected]

    #243001 Reply
    Vagabond MD Vagabond MD 
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    Status: Physician
    Posts: 3486
    Joined: 01/21/2016

    Speaking as the former head of a radiology SDG, if I found myself in a negotiation with an aggressive “contract negotiator”, there is a pretty good chance that the offer gets pulled.

    It probably depends what kind of job you are negotiating, and given your screen name (Rad), I think that my comment likely applies.

    #243005 Reply
    Avatar TravisRADMD 
    Participant
    Status: Physician
    Posts: 14
    Joined: 08/24/2019

    Right now I just have a pre-offer term sheet. No red flags but there were some things I didn’t fully understand that applied to benefits and growth. It’s not a binding contract so is it OK to just sign and go forward with the contract creation. I’m just wondering about signing off on something I don’t fully understand and it ends up being something that needs to be changed during contract analysis/negotiation and this causing animosity when they say “your client signed off on it in the pre-offer”.  Should I involve the attorney in the pre-offer term sheet? I would prefer to wait so I can get the actual contract and attempt evaluating its complexity before I decide on $650 or $2700 in fee. Thoughts?

    #243007 Reply
    Avatar ZZZ 
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    “That’s silly! A big point of the third party is to absorb all the potential animosity that might arise out of the negotiation process.”

    Until you realize your sweet contract negotiator angered your potential employer and your offer gets pulled. The last two people my group hired that paid a 3rd party got less favorable deals than docs who didn’t.

    If you negotiate reasonably with your potential employer, there’s no reason animosity would arise. And frankly, if making reasonable asks results in a volatile situation, that’s probably a useful tell as to how things will go in the future.

    It’s your money, if it’ll help you sleep at night, spend it. But just like selling a house or investing your money, paying someone doesn’t guarantee better results than you can achieve by yourself.

    #243010 Reply
    jfoxcpacfp jfoxcpacfp 
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    Status: Financial Advisor, Accountant, Small Business Owner
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    “That’s silly! A big point of the third party is to absorb all the potential animosity that might arise out of the negotiation process.”

    Until you realize your sweet contract negotiator angered your potential employer and your offer gets pulled. The last two people my group hired that paid a 3rd party got less favorable deals than docs who didn’t.

    If you negotiate reasonably with your potential employer, there’s no reason animosity would arise. And frankly, if making reasonable asks results in a volatile situation, that’s probably a useful tell as to how things will go in the future.

    It’s your money, if it’ll help you sleep at night, spend it. But just like selling a house or investing your money, paying someone doesn’t guarantee better results than you can achieve by yourself.

    Click to expand…

    Do you really think all contracts are black and white? Or that firms that specialize in this area would stay in business if physicians typically had the experience you describe above?

    I believe most of the work CD offers is not in the higher-priced negotiation services, but in contract review, probably the same for Resolve. Why not start there?

    Johanna Fox Turner, CPA, CFP: I am not your financial advisor; any responses are for general purposes only
    http://www.fox-cpas.com/for-doctors-only ~ [email protected]

    #243014 Reply
    Liked by madinat
    Avatar jacoavlu 
    Moderator
    Status: Physician, Small Business Owner
    Posts: 2462
    Joined: 03/01/2018

    I would simply ask for clarification of the term sheet points that you don’t fully understand.

    The Finance Buff's solo 401k contribution spreadsheet: https://goo.gl/6cZKVA

    #243015 Reply
    Avatar Tim 
    Participant
    Status: Accountant
    Posts: 3325
    Joined: 09/18/2018

    “Should I involve the attorney in the pre-offer term sheet?”
    Although not binding, a letter of intent has a purpose which is both parties are in agreement with the terms with the detail contract to follow according to the terms.
    If you don’t understand it, don’t agree. That is one of the key points of a contract review ,regardless who is engaged, educating you on what you are responsible for providing and what you receive in return. You are already in contract negotiations. The LOI terms will be included. Simple solutions are available to keep negotiations going smoothly. For example, start date.
    Crossing the date out and TBD written in. Get help if you need it. Even if zero additional comp or benefits are increased, you need to understand the LOI and contract.

    #243016 Reply
    Avatar Michael Scarn 
    Participant
    Status: Physician
    Posts: 26
    Joined: 12/09/2018

    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.

    #243020 Reply
    Liked by Tim
    Avatar ZZZ 
    Participant
    Status: Spouse
    Posts: 728
    Joined: 06/18/2018

    @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?

    #243023 Reply
    fatlittlepig fatlittlepig 
    Participant
    Status: Physician
    Posts: 1287
    Joined: 01/26/2017

    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.

    #243025 Reply
    Avatar EntrepreneurMD 
    Participant
    Status: Physician
    Posts: 394
    Joined: 06/10/2019

    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!

    #243026 Reply
    Liked by Tim, ZZZ

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