In the dental community, Associate Agreements can be a polarizing topic. Most dentists know someone who has been negatively impacted by an ineffective- or non-existent Associate Agreement. Whether it’s a new grad limited by aggressive restrictions or a practice owner stuck in a relationship that is no longer working, it is understandable that associates and owners alike have been weary of these agreements in the past. The good news is we can help.
Much like a romantic relationship, working relationships are often entered into with excitement and with little concern over how things may change with time. That is where an Associate Agreement comes in. Think of this agreement as a framework for the future. To ensure this relationship has a solid foundation, both the owner and the associate need to know what they are getting themselves into- and if things change how they can get out of, or more optimistically buy into, the practice. This is why working with your lawyer to draft a fair and adaptable Associate Agreement is a key step prior to hiring or being hired.
Owners: You’ve worked hard to start your practice and build your patient base, and when you reach the point where you can no longer do it on your own, it’s time to find an associate. But before you hire that perfect associate, this is the best time to outline how the proposed relationship will work: Will it be short-term? What days and times are available in the clinic? How will their compensation be structured? Are there benefits you can offer them? Putting your mind to these questions helps to clarify both parties’ responsibilities.
Other important considerations for Associate Agreements focus on how things might change. Maybe you are succession planning for your practice and hoping that after a year or two into this relationship your Associate will be prepared to buy into the practice. Perhaps an expansion- or additional location- is in the works and you need the days and times they’re available to be flexible. If you sell the practice, you need to know how much notice you will need to give your associate. And then the necessary (but sometime uncomfortable) subject of what happens if this relationship needs to end. Setting out sufficient notice periods and confidentiality clauses can assist in minimizing the affect on your practice.
Non-compete provisions, often referred to as restrictive covenants, are regularly part of Associate Agreements. The effectiveness of these terms rely on how reasonable they are in the circumstances, which further adds to the motivation of working with a lawyer to draft the agreement. Not only can a lawyer increase the effectiveness of the terms, they can help you to avoid future disputes. Plus it is good practice planning to have a form of Associate Agreement you can personalize for future associates.
Associates: From your perspective the most important reason to have an Associate Agreement is so that you know what you are agreeing to. Often these agreements are drafted by owners however there are still key considerations to be aware of when you are negotiating and signing an Associate Agreement.
Importantly you need to know how you will be paid, and whether this may change over time or be affected by your production or collections. Are you comfortable with the restrictions (if any) regarding where you work- either during or after this agreement? Is there a possibility to renew or revise the Associate Agreement? And much like the owner’s considerations on how to handle the end of this relationship, as an associate you need to determine what will be required if you choose to leave. Obtaining independent legal advice on an Associate Agreement is a smart way to ensure you have an informed interpretation of the agreement before going forward.
An Associate Agreement should focus on the goals and expectations of both parties, and while this includes outlining boundaries and limitations, the agreement should be adaptive and avoid stifling the evolution of the relationship. Whether you are an owner or an associate, you want the framework of your relationship to be drafted by a knowledgeable lawyer.
The information provided above is for educational purposes only. This information is not intended to replace the advice of a lawyer or address specific situations. Your personal situation should be discussed with a lawyer. If you have any questions or concerns, contact a legal professional.