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November 1, 2024

Helping physician candidates through contract negotiations

The process of sourcing, interviewing and hiring physicians can be lengthy - especially if conversations go sideways once an offer is imminent. Yet sometimes physician candidates themselves make errors that can derail the entire process simply because they’re new to negotiating.

You may be able to help them avoid some of these mistakes.

Help them learn what’s negotiable

Sometimes physicians may not realize that, although an offer letter or term sheet is "non-binding," these documents are intended to reflect firm agreement on the terms they contain.

Unfortunately, this leads those physicians to assume wrongly that critical factors like compensation are still up for negotiation at the contract stage, not realizing the offering employer considers the matter settled.

Since the earlier documents may not even appear to be contracts (and since not all employers use offer letters, term sheets, or letters of intent to solidify key terms), physicians may neglect even to tell their attorneys they’ve signed them. The attorney may forge ahead until it’s revealed that, regrettably, the physician signed an agreement under the false assumption that it wasn’t "final."

When this type of misunderstanding occurs, it often means a costly lose-lose for employer and physician.

TRY: Recruiters may be able to avoid this unhappy scenario by offering candidates (especially their strongest ones) some inside knowledge of the hiring process.

One relatively straightforward way is to explain to candidates that "non-binding" doesn’t mean the terms are still open to negotiation - so they should not sign with the expectation that terms are fluid.

Help them understand the help available

The guidance physicians receive ultimately depends on the attorney they choose. You can help here by pointing out that it’s preferable to work with an attorney who has experience with physicians and employment contracts.

It’s not uncommon for physicians to believe any licensed attorney can read a contract and "spot the problems." This cost-avoiding mentality can ultimately be penny-wise and pound-foolish. Attorneys who frequently work with residents and fellows are much more likely to be conversant in current physician contract structures, and therefore able to give better, more current, specific advice.

The employer will likely also prefer to work with a physician’s attorney who already understands the ins and outs of physician scheduling, malpractice coverage and other domain-specific terms that are common in physician employment agreements.

"Just like I wouldn’t go to a brain surgeon if I had a stomach ailment, we lawyers all have our specialties," says Ericka Adler, shareholder and health care practice group leader at Roetzel & Andress in Chicago. She also notes that hiring a specialist is likely less expensive than residents and fellows may fear. "Many health care attorneys offer special rates for residents and fellows to make sure they can obtain the review they need."

TRY: Ask candidates whether they have legal help, and suggest they consider hiring an attorney before signing any agreement. It may seem counterintuitive to recommend a candidate "lawyer up" even before an initial offer is presented, but both sides can benefit when the candidate engages competent legal advice.

The process will likely be more efficient with the physician’s counsel able to explain the implications of legal terms and keep the discussions moving in the right direction.

Read PracticeLink articles by Laurie Morgan

Laurie Morgan, MBA



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