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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

Contract Negotiations

Elizabeth Rocovich Cline, J.D., Ph.D.

i introduction
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

ii common pitfalls in negotiating contracts
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
Not asking right questions

-b/c you:

(1) don’t know what you really want/need, and

(2) don’t do your homework

iii effective planning before negotiations
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

2. Working in a gp practice—it’s a


a. Observe work environment of

gp practice; ask others

b. Find out why any drs/staff

recently left the practice

c. Find out if big changes are on horizon for the gp. practice


-downsizing in staff/space

-better benefits, etc.

3. Working in hospital—it’s a


a. Talk w/drs there

-how smoothly do things


-big changes on the horizon?

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

iv effective negotiation techniques
IV. Effective negotiation techniques
  • Be Prepared

1. Do your homework (see above)

2. Know what you want/need

3. Know your priorities

-“deal-makers” and


-be realistic, but assume

everything is negotiable

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

c. The need for your specialty or


d. The doctor to patient ratio in the area

Expect to be

“out-techniqued” by other party

-remember: it’s a business, and administrators & attys are the ones who work on the deals

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
C. Prepare to respond to the following approaches:

1. The “I have no authority”

approach (my favorite)

2. The “Yes, we put all of the

changes that you wanted in

this new draft” approach

3. The “We can’t change anything in this contract” approach

(“we give this form to all of the doctors”)

6. The “It’s not written in the contract, but you can take my

word for it” approach

v practical matters
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

3. Termination of employment

4. Definitions of terms like “illness and “disability”

5. Compensation

-flat salary?

-income guarantee?


-after year 1, does compensation become productivity-based?

Does the employer pay for any of the following?
    • Board fees
    • Journal subscriptions
    • Dues to medical groups/associations
    • CME allowance
Does the employer offer and/or pay for any of the following?
    • Insurance (life/health/disability)
    • Malpractice insurance**
    • 401k (any matching?)
    • Pension plan
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
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?
6. Job duties

What does the contract mention or fail to mention?

  • call coverage?
  • meeting attendance?
  • hours at clinic/practice/hospital?
When to “lawyer-up”

C. When to sign the contract

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
contact information
Contact Information

Elizabeth Rocovich Cline

540-774-8800 (ph.)

540-774-8808 (fax)