Associate, Partner and Employment Agreements
Successful Associate Agreements provide clear, agreed terms for a wide range of Doctor/Associate issues. For instance:
- If or when will the Associate become Partner and/or Owner?
- Is there a first right of refusal in place?
- Will there be a non-compete agreement?
- What are the terms if the Associate decides to leave?
- How will the Associate be paid? (A percentage of production or collection? Straight salary?)
A good Associate Agreement protects both parties and lays out expectations and responsibilities for everyone involved.
Employment Agreements are common in cases where a doctor may not want to own a practice, but instead choose to work a certain number of days per week as an employee. Doctors nearing retirement often choose this option, as do those who simply want to spend less time at work and more time at home. The terms of good Employment Agreements are clearly defined, understood and agreed, and address a host of key issues, for instance, agreement as to:
- doing 'ethical work'
- keeping insurances current
- keeping licensure current
- number of work days
- termination requirements
A good employment agreement sets out clearly the roles and responsibilities of both parties, and is key to long-term success.
Partnership agreements set out the terms for business ownership between partners, and involve not only agreement on monetary issues, but also:
- When ownership is taken over
- What the buy-in is and how the value is determined
- What the time period is to pay off the $ owed, or to accept partnership?
- When or if to bring in a new Associate (if Doctor A is retiring, for example)?
- How new patients are handled between providers
- Budget issues -- how money is earned and spent
Partnership agreements provide a structure for ownership and establish timelines that are agreed and understood by all.