Article

Constructing an Offer - What terms to consider?

Provided by:  Jennifer Kirschenbaum, Esq.

August 13, 2020

Question:

Hi Jennifer, 

I am looking to bring on an associate physician to my practice for the first time.  What are some areas I should consider as I construct an offer?

Thanks, 
Dr. L


Answer:


I've asked Michael Foster, Esq. to chime in on this one and here is his take - 

This is an important question because oftentimes many of the "business" points will be agreed upon by the parties prior to the involvement of an attorney.  Some of these terms may seem obvious and include schedule, base compensation, benefit, etc.  Other terms that may not so seem obvious include which party is paying for malpractice insurance, incentive bonuses and term of the agreement.  These terms are often discussed and agreed upon prior to drafting an agreement but can always be adjusted depending on the negotiation process.

Some of the terms that I discuss with clients during the drafting process that may not be brought up in the initial negotiation with the candidate include provisions surrounding termination and restrictive covenants.  For example, generally both parties have the ability to terminate the agreement "without cause" upon some notice period.  The notice period (30/60/90+ days) is dependent on your practice and the amount of time you are comfortable with to find a replacement if necessary.  Additionally, most practices will want to include a non-compete clause which will protect your business interests post expiration or termination of the agreement.  Depending on where you are located, you will want to consider both the duration (months or years) and geographic radius (blocks or miles) for the non-compete. 

Overall, as your attorneys we can advise you on how to protect your interest and provide you with our general knowledge of the industry standard, but the final decision on all terms remains with you.  To stay organized and efficient with the terms you do wish to present, it is not a bad idea to start with a term sheet, which we can help craft so you start with a complete-ish position before starting discussions.   Let us know if we can help as a first step.  


Looking for the KK Healthcare Exchange?  Click Here. 

MISSED OUR RECENT WEBINARS?  CLICK HERE ANYTIME!
Looking for HIPAA and compliance forms?  
Click here to visit our website.
Have a question or comment for Jennifer?
Contact Jennifer at Jennifer@Kirschenbaumesq.com or  at (516) 747-6700 x. 302.
Interested in having Jennifer speak at an event or
at a residency/fellowship program?
Contact Jennifer directly at (516) 747-6700 x. 302 or at Jennifer@Kirschenbaumesq.com
Click here to learn about
K&K's Prepaid Legal Audit/Investigation Defense Now!

Article

Constructing an Offer - What terms to consider?

Provided by:  Jennifer Kirschenbaum, Esq.

August 13, 2020

Question:

Hi Jennifer, 

I am looking to bring on an associate physician to my practice for the first time.  What are some areas I should consider as I construct an offer?

Thanks, 
Dr. L


Answer:


I've asked Michael Foster, Esq. to chime in on this one and here is his take - 

This is an important question because oftentimes many of the "business" points will be agreed upon by the parties prior to the involvement of an attorney.  Some of these terms may seem obvious and include schedule, base compensation, benefit, etc.  Other terms that may not so seem obvious include which party is paying for malpractice insurance, incentive bonuses and term of the agreement.  These terms are often discussed and agreed upon prior to drafting an agreement but can always be adjusted depending on the negotiation process.

Some of the terms that I discuss with clients during the drafting process that may not be brought up in the initial negotiation with the candidate include provisions surrounding termination and restrictive covenants.  For example, generally both parties have the ability to terminate the agreement "without cause" upon some notice period.  The notice period (30/60/90+ days) is dependent on your practice and the amount of time you are comfortable with to find a replacement if necessary.  Additionally, most practices will want to include a non-compete clause which will protect your business interests post expiration or termination of the agreement.  Depending on where you are located, you will want to consider both the duration (months or years) and geographic radius (blocks or miles) for the non-compete. 

Overall, as your attorneys we can advise you on how to protect your interest and provide you with our general knowledge of the industry standard, but the final decision on all terms remains with you.  To stay organized and efficient with the terms you do wish to present, it is not a bad idea to start with a term sheet, which we can help craft so you start with a complete-ish position before starting discussions.   Let us know if we can help as a first step.  


Looking for the KK Healthcare Exchange?  Click Here. 

MISSED OUR RECENT WEBINARS?  CLICK HERE ANYTIME!
Looking for HIPAA and compliance forms?  
Click here to visit our website.
Have a question or comment for Jennifer?
Contact Jennifer at Jennifer@Kirschenbaumesq.com or  at (516) 747-6700 x. 302.
Interested in having Jennifer speak at an event or
at a residency/fellowship program?
Contact Jennifer directly at (516) 747-6700 x. 302 or at Jennifer@Kirschenbaumesq.com
Click here to learn about
K&K's Prepaid Legal Audit/Investigation Defense Now!