Painless contract negotiation possible, experts say

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Painless contract negotiation possible, experts say

Feb 01, 2004

The outcome of a new associate's first contract negotiations can set the stage for a rewarding or disappointing career.

Practice and legal consultants offer advice to keep you in the first category.

First, one legal advisor says when negotiating a contract, new graduates need to be comfortable with who they're going to be working with - primarily the owner.

"It's difficult to determine whether you are comfortable or not," says Edward J. Guidicci, Esq. of Guidicci & Guidicci, P.C. in Denver. "But in my opinion, you have to go basically by gut instincts. When you walk away from that meeting, you have to feel that this person is honest and is going to treat you fairly."

The second step for new graduates is to seek out a contract in writing. Giudicci says he suggests a formal agreement, because it protects the practice as well as the doctor.

"What I tell associates is that if a practice refuses to put a contract together - and you really can't make them - the potential associate needs to write a letter to the practice owner confirming material terms - compensation, vacation, CE, stipends, benefits, term of contract," he says.

Without a written contract, the finer details of compensation, such as production-based percentages, may get lost in the hiring process.

"There are all sorts of ways people can fail to communicate exactly what they're agreeing on. What happens when there's a misunderstanding, two doctors start distrusting each other. That is a real problem in my book," Giudicci says.

Dr. Thom Haig, a Gardnerville, Nev.-based consultant with Veterinary Practice Consultants, recommends new graduates consult with professional advisors or attorneys so they are not misled in the process.

He adds, "The generic advice I'd give new associates is that they ought to have a contract and everything is negotiable."

When negotiating, Haig suggests seriously evaluating the practice and staff to ensure it's the place the potential associate wants to be.

"I know it's really hard, especially in their senior year, but they should spend two to three days at least in that practice to know what they're getting into," Haig says.

Compensation breakdown

In determining how an associate will be compensated, recent graduates are encouraged to determine whether they are willing to work on a pure percentage basis or whether they prefer a base salary plus percentage.

"If they can start producing in a short period of time they will make more money given a straight percentage than they would with a base plus," Giudicci says. "Normally they can negotiate a higher percentage, but there's no guarantee and that's scary for new grads."

The drawback to percentage-based plans is that not all associates are prepared to produce at levels expected. Normally it can take anywhere from six to 12 months for associates to get up to speed.

"Frequently associates may take multiple years before they become really good producers," Guidicci says. "It could be dangerous to go into a straight percentage employment arrangement unless they're comfortable that they can produce."

Adds Haig, if opting for production-based pay, make sure to request a written statement defining production pay. How are work hours defined? Are (associates) expected to take emergency calls? Are they expected to work weekends and, if so, how much and how often? Do the same for benefits and pay.

Students weighted down with student loans may opt for the more secure salary-based approach. "Practice owners do recognize that the need for many debt-ridden graduates to have a security blanket, which is a base salary, is reasonable," Guidicci says.

Whichever compensation plan associates choose, Haig advises new graduates not to be hindered by financial details. "Don't let financial details screw up a good deal if you really like the practice. On the other hand, don't go into a bad deal just because of good financial details."

At end of day

The bottom line, experts say, is that the soon-to-be associate can't be too well versed in compensation and negotiating issues. Some advisors recommend students attend sessions on associate compensation issues hosted at national conferences, while others recommend students participate in programs at their respective veterinary schools.

Additionally, "recent grads need to become informed, generally speaking, about laws in states where they choose to practice on compensation types of issues, so they can go into a situation understanding what their rights and responsibilities are," Giudicci says.

For insight on actual experiences of young associates who have had good and bad luck with their contract, as well as expert opinion on the pros and cons of contract negotiations, Haig refers new graduates to the Veterinary Information Network at www.vin.com.

Prior to signing on the dotted line, Haig encourages new graduates to make sure the practice is a team fit.

"Do you really like the practice? Does the practice have the same goals and philosophy that you do? If there's opportunity to talk to other associates or previous associates in practice, make sure what you're being told is, in fact, what actually happens," he urges.