Good reasons doctor/therapist(s) is seeking an associate:
- Doctor/therapist(s) is too busy & wants to reduce his/her patient load
- Doctor/therapist(s) is busy & wants to reduce work hours, take more holidays, more time with family, hobbies, etc.
- Doctor/therapist(s) is preparing to retire & wants to sell
- Doctor/therapist(s) wants someone to build practice with buy in opportunity
Poor reasons for an associate:
- Doctor/therapists wants associate to build practice with no buy in opportunity
- Doctor/therapists wants associate to share costs/overhead
Positives of becoming an associate:
- Low start-up cost or with no initial capital required
- Overhead or costs are a percentage of revenue, not fixed
- Immediate income & positive cash flow (small initially)
- Immediate patient load (small iniytially)
- Established location – greater opportunity for new patients
- May have opportunity to purchase/buy in
- Observe/learn practice operations/procedures
- Observe/learn Doctor/therapist(s) clinical/treatment style/techniques
- Easy access to second opinion when required
- Trained & experienced staff – a good info source
- Access to clinic’s contacts & suppliers
- Access to re-activate old patient files
- Access to evening & weekend hours – good for new patients (hard for personal life)
- No administrative responsibilities
- Doctor/therapist(s) is/are responsible for your source deductions
Negatives of becoming an associate:
- No ownership, an employee, therefore little influence on issues
- Income is slow to build, perhaps competing with existing Doctor/therapist(s)
- Income potential is lower than ownership
- Friction over clinical/treatment style/beliefs
- Personality conflict with staff – no power to hire/fire
- May rush into a poor situation/contract & be locked in for years
- Practice not as busy as you were led to believe
- Doctor/therapist(s) hires you to help build practice
- Doctor/therapist(s) hires you to lower costs & overhead
- Your dream location for practice is taken during your associate-ship
What should be included in a fair & equitable associate agreement?
- Ensure a lawyer always evaluates the agreement prior to signing
- Payment should be ~ 55%-65% of revenues generated for the clinic
- Revenues should include treatments, reports & products sold
- Payment % should increase with increasing revenues to a fixed maximum
- Doctor/therapist(s) hours should rarely overlap, less competition
- New patients should be evenly shared, unless patient is very specific
- A reasonable non-compete clause
- A non-solicitation agreement
- A first right of refusal on the sale of the practice
- An indemnification & save harmless clause for both parties
- A probation period for both parties to assure the relationship is fair/equitable
- Holidays of two-three weeks yearly
- Not allowed to bring in other associate unless agreed upon
- Doctor/therapist(s) responsible for all expenses except licensing & malpractice
