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Contract Negotiations

Contract Negotiations. Elizabeth Rocovich Cline, J.D., Ph.D. I. Introduction. Why are we here? - imp of preventative legal medicine -it’s a business to ER, and you should look at it as business, too. II. Common pitfalls in negotiating contracts. Being too polite

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Contract Negotiations

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  1. Contract Negotiations Elizabeth Rocovich Cline, J.D., Ph.D.

  2. I. Introduction Why are we here? - imp of preventative legal medicine -it’s a business to ER, and you shouldlook at it as business, too

  3. II. Common pitfalls in negotiating contracts • Being too polite • Assuming that the other party has your best interest at heart • Not knowing what you really want out of contract and job

  4. Not asking right questions -b/c you: (1) don’t know what you really want/need, and (2) don’t do your homework

  5. III. Effective planning before negotiations • Homework 1. Financial questions a. Salaries of other drs in your position and geographical area b. Cost of living in the area

  6. 2. Working in a gp practice—it’s a marriage a. Observe work environment of gp practice; ask others b. Find out why any drs/staff recently left the practice

  7. c. Find out if big changes are on horizon for the gp. practice -expansion -downsizing in staff/space -better benefits, etc.

  8. 3. Working in hospital—it’s a bureaucracy a. Talk w/drs there -how smoothly do things run? -big changes on the horizon?

  9. Ask family/significant other and yourself what you want out of this job -many drs don’t do this!! d. Call in the “troops”—tell your lawyer before you start negotiating

  10. IV. Effective negotiation techniques • Be Prepared 1. Do your homework (see above) 2. Know what you want/need

  11. 3. Know your priorities -“deal-makers” and “deal-breakers” -be realistic, but assume everything is negotiable

  12. 4. Know what you are worth—in terms of: a. Type of medicine that you practice b. Number of drs in your area with your specialty/practice

  13. c. The need for your specialty or practice d. The doctor to patient ratio in the area

  14. Know what gp practice (or hosp’l) wants/needs

  15. Expect to be “out-techniqued” by other party -remember: it’s a business, and administrators & attys are the ones who work on the deals

  16. Never accept a verbal offer! • After verbal offer, request a letter of intent before you receive a written contract • Letter should outline basics of the offer, i.e., salary, termination provisions, job duties/obligations

  17. C. Prepare to respond to the following approaches: 1. The “I have no authority” approach (my favorite)

  18. 2. The “Yes, we put all of the changes that you wanted in this new draft” approach

  19. 3. The “We can’t change anything in this contract” approach (“we give this form to all of the doctors”)

  20. 4. The “You don’t really need to understand this part—I don’t” approach

  21. 5. The “Don’t use a lawyer—she’ll just want to drag it out” approach

  22. 6. The “It’s not written in the contract, but you can take my word for it” approach

  23. V. Practical Matters • Legal implications of common k clauses—what to look out for in drafts 1. Non-compete clause, a.k.a. covenant not to compete

  24. 2. Term of employment and renewal of term

  25. 3. Termination of employment 4. Definitions of terms like “illness and “disability”

  26. 5. Compensation -flat salary? -income guarantee? -bonus? -after year 1, does compensation become productivity-based?

  27. Does the employer pay for any of the following? • Board fees • Journal subscriptions • Dues to medical groups/associations • CME allowance

  28. Does the employer offer and/or pay for any of the following? • Insurance (life/health/disability) • Malpractice insurance** • 401k (any matching?) • Pension plan

  29. Does the employer offer and/or pay for any of the following? • Sick leave or personal leave • Vacation time • CME time • Moving bonus • Signing bonus

  30. Some of the items that I just mentioned are items that you can negotiate!

  31. Other related questions to ask: • How is income shared among the group? • Is there a buy-in? • When is the employee eligible? • What is she buying? (assets? vote as SH?) • How much did the last dr. pay for a “buy-in” opportunity?

  32. 6. Job duties What does the contract mention or fail to mention? • call coverage? • meeting attendance? • hours at clinic/practice/hospital?

  33. -**Is moonlighting allowed or specifically prohibited?

  34. When to “lawyer-up” C. When to sign the contract

  35. Why you must understand what each para. of your k means (English, not “Legal-ese”) • What to do if hospl/gp practice is not honoring k clause

  36. Contact Information Elizabeth Rocovich Cline ecline@mossandrocovich.com 540-774-8800 (ph.) 540-774-8808 (fax)

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