Here's a list of key questions that you should consider asking yourself or others as you go through the process of choosing an associateship. By clicking on the "+" sign, you find an answer that has been provided by people that have gone through the same process.
Let's start with some general advice and information about Associateship Agreements.
Why should I have an Associate Agreement?
The Associate Agreement protects the rights and obligations of both parties. The agreement outlines the terms of the contractual obligations and rights for both the principal and associate dentist. It will help clarify items or situations that can lead to disagreements before they arise.
The contract will also help to clearly identify the principal dentist in the event that there are other people and/or corporations involved in the practice.
If for some reason the working relationship takes a turn for the worse, a lawyer will always ask if a written contract exists. If the contract was poorly written, it may lead to legal disputes which are costly in terms of time, money and energy.
What are the pros and cons of having an Associate Agreement?
The associate agreement provides a framework for both the principal and associate to follow and to understand their rights and obligations. It also helps to reduce or resolve any disputes that may arise upon termination of the relationship.
If it’s going to restrict me later, isn’t it better just to operate without an Associate Agreement?
The Associate Agreement sets out boundaries for both parties. At times, they may be skewed in favour of the owner dentist.
What are the basic principles that should be covered in the Associate Agreement?
It is a basic principle of contract law that for a contract to be enforceable, there must be an offer, a corresponding acceptance, and “consideration” (i.e., something of tangible value) flowing to each of the contracting parties.
Where an associate is being engaged for the first time by a principal, it is important to ensure that the parties’ contract for services is signed before the associate commences work in the principal’s practice. Where this occurs, the consideration flowing to the associate is the opportunity to provide services within the practice, in return for the agreed fee.
The situation is different, however, if a principal wants to introduce a written contract after the associate has already begun to provide services within the practice. If the principal wants the contract to be enforceable in this type of situation, the principal must ensure that the contract provides the associate with some sort of fresh consideration (e.g., a fee increase, a signing bonus, etc.) in return for agreeing to the terms set out in the written contract. If this does not happen, then even if the associate signs the new contract, the principal may later find that a court will not enforce it because the associate did not receive any consideration in return for signing.
With respect to consideration, the relationship will always be more fruitful if both parties are in a “win-win” situation. At times, monetary compensation such as increasing the associate fee from 40 to 42% or an in-kind amount like increased vacation time may be helpful. (Since vacation is unpaid personal leave for the independent contractor, this may not be adequate consideration as a signing bonus.)
Nature of Relationship – Employee vs. Independent Contractor
Associate dentists are typically considered to be independent contractors rather than employees by principal dentists. The employee vs. independent contractor relationship has significant legal and tax implications. As such, legal counsel is advised before making a decision one way or the other. Although the independent contractor relationship affords both parties certain advantages, the relationship must be outlined, documented and meet certain legal tests to meet the status of independent contractor.
Generally speaking, employees enjoy more legal protection than independent contractors. The law provides employees with significantly more rights than independent contractors. Independent contractors are self-employed and their rights are outlined by their contract with the principal. Additionally, any income from the work they provide is considered business income, not employment income.
To be deemed an independent contractor or consultant, a written contract is not enough. Courts will examine the actual working relationship and its consistency with the definition of an independent contractor or consultant. Some of the factors that are considered in determining the nature of the relationship include:
- How much control does the principal have over the treatment and activities of the associate?
- Is there any opportunity for the associate to profit through performing the work?
- Is there a risk of loss by the associate?
- Does the associate have the ability to hire/terminate his/her own staff?
- Does the associate have the ability to work in other practices?
- Does the associate pay his/her own expenses?
- How is the associate remunerated?
- Who provides the tools, equipment and supplies for the work?
Usually independent contractors cover the cost of their equipment, supplies and expenses. If these are provided by the principal dentist, it may indicate an employee–employer relationship. Furthermore, if there is no financial risk to the associate and the work is controlled by the principal and the compensation is not dependent on his/her work performance, this also may be indicative of an employee relationship.
Any expenses that will be the responsibility of the associate should be outlined clearly and specifically in the associate agreement. These expenses usually include: dental registration and licensing, lab fees, continuing education and other professional courses, insurance, special or different instruments, business license, marketing, automobile and accounting fees. The payment of these expenses will strengthen the associate’s status as an independent contractor.
The contract should also state that the associate is free to provide services to other clients and dental practices, as long as there isn’t a conflict with the terms of the current agreement and aren’t provided on the principal’s premises.
Interestingly, in Quebec, the treating dentist (whether it is the owner or the associate) is ultimately responsible and “owns” the patient’s chart. In this situation, the treating dentist has the obligation to keep the patient’s chart. As such, the associate would have to take his/her patients’ charts when moving to a different practice.
Will I have any say in the types of materials I want to use? Can I buy my own technology and use it in the office? (e.g., different endo system, etc.)
This information should be explicitly outlined in the Associate Agreement. Any equipment or materials purchased by the associate should be noted in the contract and provisions made which allow the associate to take the equipment/materials when the contract is terminated.
It is not unreasonable that the associate be provided with the equipment that will allow him/her to provide care appropriately or in a manner that is comfortable for them. But associates must also understand that there is a balance between treatment and the business side of dentistry.
If the practice won’t pay for the materials I want to use, can I purchase them and use them?
This should be discussed with the owner dentist and outlined in the contract.
If I purchase some of my own materials, will I get a higher percentage of the fee in this case?
It is common for the Associate Agreement to state that supplies and equipment will be provided by the principal dentist in exchange for a portion of the billings of the associate. This will vary from practice to practice but, may not be an accepted arrangement.
Engagement & Services
The Associate Agreement should state explicitly that the associate is an independent contractor engaged by the principal dentist and clarify that all services will be provided by the associate and not another individual employed by the associate.
Will I be restricted with respect to the types of treatment I’m allowed to perform even if they are within the scope of my abilities and further education (e.g., wisdom teeth, Invisalign?)
The Associate Agreement should stipulate the services to be provided by the associate and any other expectations regarding treatment including:
- Range of dental treatments to be provided by the associate
- Expectations with respect to production, revenue and patient volume
- Allocation of patients to the associate
- Responsibility of patient care – only the associate or shared responsibility
- Responsibility for creation and/or changing patient’s treatment plan
- Restrictions on associate regarding referral to specialists external to practice
Restrictions placed on associates should be based on experience and expertise. If any dentist is not comfortable with a certain procedure, it is best for the patient to be seen by someone who is proficient in that procedure.
Will new patients who come to the practice be booked with me? If there is more than 1 associate, how will new patients be allocated?
When an associate is paid a salary or a flat rate, he/she receives compensation whether patients are treated or not. However, when compensation is tied to the production or amount of treatment that is provided within the practice, there must be a suitable patient flow for the associate. This can be accomplished by moving some patients from the principal to the associate to help fill this new schedule or by allocating new patients to the associate, unless the patient specifies otherwise.
Will patients stay with the same dentist for all treatments?
This will depend on each office and the practice philosophy. It should be discussed ahead of time with the principal dentist.
Is there a possibility that other dentists in the office will be completing procedures that I have treatment planned?
This is also something that should be discussed in advance with the principal dentist. No two dentists or dental offices are the same. Some will want patients to have continuity of care and prefer the patient to stay with the same dentist throughout. However, the patient’s comfort level with a dentist is the main consideration.
Will my treatment times be monitored/regulated or do I have freedom to book patients for as much or as little time as I personally require to complete a given procedure?
From a patient care perspective, the amount of time should be the time that will allow the dentist to complete the procedure with care and in the best interest of the patient.
What would be an acceptable amount of time to book a patient for a molar root canal, wisdom tooth extraction, crown prep, simple filling?
This will depend upon the level of expertise and comfort of the treating dentist and the individual patient needs (e.g., strong gag reflex, anxiety, etc.). Time to complete patient care will vary from dentist to dentist. However, it may be helpful to ask for some specific guidelines on how many units to book to complete procedures, to help you use your time efficiently.
What constitutes professional courtesy in the practice? Will I be compensated for retreatment of work done for patients by other dentists in the practice that will not be charged for?
There may be a degree of professional courtesy that applies to specific situations. This should be discussed openly with the owner and details outlined in the contract.
Examples may include:
- Replacing a crown if it was done within the last 3 years
- Providing care at a reduced cost for a patient who is in need and unable to afford treatment
What is the protocol for discussing failed treatment with patients when it’s done by another dentist within the practice?
No judgement should be passed on the work of another dentist because it’s hard to know the circumstances under which it was completed or how the patient has cared for it. If there is a complaint made, this will be a regulatory issue not a contractual issue.
There should be a written protocol for this specific type of situation within the office. It is professional courtesy to allow the first treating dentist to speak with the patient and find out the issues the patient is having.
If dentists share patients and one decides to change the treatment set out by another dentist, how do we approach the patient and as dentists, how do we sort out the treatment plan?
This should be discussed with the dentist ahead of time. The treatment plan changes should be discussed with the other dentist(s) professionally before discussion takes place with the patient. The patient’s best interest should always come first.
Term of Contract
How long is the Associate Agreement in place?
The length of the contract can be fixed or indefinite. In either case, the start and expiration date should be clearly outlined in the Associate Agreement. If the agreement is fixed, it should also have provisions stating how it may be extended and/or renegotiated upon expiration.
Usually, it is reasonable to have a contract for one year which is renewable up to a maximum two years.
Should the contract include a probation period, where either party can decide not to continue?
Ideally, for the associate–principal relationship to work, both parties must be compatible. This is not always easy to assess at the outset. For this reason, the parties may wish to include a specified period of time as a trial or probationary period, in the contract during which either the principal or the associate can terminate the agreement on short notice if there is a poor “fit” between them. The trial period can be also used as a transition period for the associate to become accustomed to the way the practice is run and become comfortable with the staff and vice versa.
Once the trial period has ended, both parties may wish to review the Associate Agreement to ensure or discuss terms that were not met. In this way, any adjustments can be made to the satisfaction of both the principal and associate dentists. The trial period is typically three months.
Should the contract be 1-year and renewable or more than 1-year?
If a contract is nearing the end of its term, it is advisable to renegotiate or renew it prior to its expiry. It is not recommended for the relationship to continue beyond the end date without a new contract in place.
What sort of qualifications or memberships do I require as an associate?
The contract should warrant that the associate is registered and in good standing with his/her College and/or as a specialist, that he/she holds the appropriate specialty registration. Additionally, the agreement should require the associate to maintain his/her professional memberships and licenses and provide proof of these on an annual basis. The Associate Agreement may also include a clause whereby the associate must notify the principal dentist if there are any claims or complaints filed against the associate, suspensions or restriction of his/her license.
We've covered the important basics of the Associate Agreement. However, there are still other more practical things you need to know and understand before accepting a position as an associate, and more importantly, signing a contract.
Premises, Equipment & Administrative Services
Are associates responsible for paying for any of the marketing, staff or equipment?
Generally speaking, the principal dentist provides the associate with the right to use the facility, equipment and administration of the practice and this should be specified in the contract. If the principal wishes to restrict the use of any of these provisions, this should also be outlined in the agreement.
The Associate Agreement should also state whether advertising will be a shared responsibility or be solely under the control of the principal.
Will I be involved, or will my opinion be consulted, on hiring/firing/reviewing staff that I work directly with (i.e., my assistant)?
The Associate Agreement should outline who is responsible for expenses related to staff compensation, hiring, firing, disciplining and managing the staff. In some instances, this responsibility may be shared with both principal and associate dentist jointly employing staff.
If the associate is responsible for paying his/her own staff, it would be reasonable to be consulted on the hiring/firing process.
How much freedom do I have to choose a lab or specialists for patients within the practice?
This will vary from office to office. Typically, the lab or specialists selected will be the ones that the principal uses. It may be that the associate already has an established relationship with a lab or specialists which may serve his/her patients well. However, this can be discussed ahead of time with the principal dentist.
Days/Hours of Service & Vacation time
The Associate Agreement should outline in detail the hours and days that the associate will work. It is advisable for the contract to include a provision that the days/hours can be amended by written agreement. Other elements for considerations may include whether the associate will provide emergency coverage, work evenings or weekends and/or a minimum number of hours per week.
Additionally, both parties should discuss whether the associate has the freedom to provide dental services to other practices. As an independent contractor, the associate is able to work in other businesses but, the principal dentist and associate will need to consider the terms of the restrictive covenant.
How much vacation time do I get? How much notice do I need to give before taking vacation?
The Associate Agreement should also specify the number of weeks per year that the associate can take as unpaid vacation time. As an independent contractor, the associate should have the right to decide how much vacation time he/she uses. The contract should also state whether the associate is required to cover any vacation time taken by the principal dentist and any further responsibilities the associate may have during that time.
Ideally, associates and owner dentists may want to offset their vacation times to ensure that patient care is available. However, during some traditional holiday periods, offices may shut down completely and therefore, the associate may be forced to take time off during this time.
Is continuing education or attendance at CE counted towards my vacation time?
The contract should also outline any specific provisions regarding continuing education time, unpaid sick leave and any other types of leave.
It is fair to negotiate vacation leave that is separate from CE time. Depending on the scheduling activities of the practice, it may be necessary to negotiate that the associate can give reasonable notice for vacation time rather than giving several months. Allowance for emergency time off is also advised.
Should I ask if the practice is considering to purchase or open other locations?
This information may not be available or may not be shared with you as an associate.
How many chairs and dental assistants would be available to me on an average day?
As a new associate, 1 assistant and 1 chair would be reasonable. Having an extra spillover chair can be useful at times for emergencies or if you are running late.
Ownership of Patients/Charts
The ownership of patients can be problematic especially when the principal–associate relationship is terminated. In the majority of situations, the associate agreements will state that all the patients of the practice are considered the principal’s patients whether or not care has been provided by the associate. The agreement may, however, make provisions for any patients which the associate specifically brings to the practice. A list of patients may be included in the agreement so that these patients are considered the associate’s patients (friends, relatives and other patients).
Am I allowed to let patients know that I’m resigning or asked to leave the practice so they know the remainder of their treatment will not be performed by me?
The contract may include language indicating that, when the associate leaves the practice, his/her patients will be notified and given the associate’s new contact information and the option to have their records transferred to his/her new practice location. Generally, this would apply to patients that are identified as the associate’s patients.
Alternatively, the associate and principal may decide to send a joint letter to the associate’s patients informing them of the associate’s departure and asking the patients to let the office know if they would like to remain in the current practice or have their records transferred to the associate’s new location.
Typically, the associate is not allowed to inform patients of the practice that he/she is leaving as this is considered to be solicitation. However, if patients inquire about the associate’s whereabouts, the practice must give the patient his/her new practice information.
Dental Assistant/Hygienist Services
The Associate Agreement should stipulate the provision of assisting and dental hygiene services. Typically, if the services of the assistant/hygienist are provided by the principal dentist, then, the resulting fees are retained by the principal. If the associate is responsible for hiring his/her own assistant/dental hygienist, the fees generated by his/her employees would be retained by him/her.
Fees, Billings & Receivables
What is the standard associate percentage?
Usually, associates are paid a set percentage of their collections (or production) with laboratory fees deducted from their pay. At times, they may be paid a flat salary. In either situation, the contract should clearly specify how the associate will be paid and how his/her fees will be calculated as well as when the fees will be paid to the associate (1st or 15th of the month, biweekly etc.).
If the compensation is based on productivity, the associate should consider whether the productivity requirements are reasonable and attainable, and how they may affect the way he/she practices. Similarly, if the compensation is based on billings, it should be determined if the billings are gross or net and how unpaid accounts will affect the associate’s compensation.
Associates may also be incentivized with a bonus structure. If this is the case, the details of the bonus structure should also be specifically outlined in the associate agreement.
The associate fee is generally 40% of collected fees, after laboratory charges. Sometimes, the cost of implants and grafting materials is also deducted. Additionally, in some practices the associate may be entitled to reimbursement for interpreting and diagnosing radiographs taken by the hygienists. However, depending on the location of the practice, the fees may be lower (35%) in an urban centre where there is an abundance of associates or higher in under-serviced areas (as high 50%). A more experienced associate with the ability to perform more complex procedures may garner a higher fee (50%). A sliding scale may also be used to determine associate remuneration where a set baseline production will be paid a certain percentage, and the percentage will increase with increments of production as determined by the owner dentist.
With respect to lab bills, do I pay the lab bill separately after I’m remunerated or is it deducted from my pay?
As part of the contract, any expenses that are deducted from the associate’s billings will be outlined. The agreement should clearly outline the manner in which the associate’s fees are calculated specifically, the percentage of the production or collections (minus deductions such as laboratory fees) and the date or schedule of payments.
If I leave, how will I know if there are any collections still owing to me?
This should be discussed with the principal dentist. It is reasonable to request reports detailing outstanding collections that remain on the associate’s account and this should be specified in the agreement.
The Associate Agreement should stipulate clearly how the associate’s billings will be collected after termination of the agreement and who will be responsible for collections. Generally, it is the responsibility of the principal dentist’s staff to collect outstanding fees and remit the fees to the associate.
How am I reimbursed for recall checks by the hygienists?
This should be discussed with the principal dentist.
Is reviewing a radiograph part of the radiograph fee owed to me during the hygiene check?
In some cases, the associates may also be entitled to compensation for reviewing and diagnosing radiographs. This should be discussed with the owner and written into the contract.
What reports will be shared with me so I can track my productions, collection and accounts receivable?
It is reasonable to request, with notice, a time to examine the books or practice financials as they relate to the associate’s account and this should be outlined in the agreement. It is in the associate’s best interest to understand the office’s practice management software. Most well-run practices will provide the associate with daily, weekly and monthly reports to help the associate track his/her billings and accounts receivable. It should be the responsibility of the associate to ensure that his/her financial records are in order.
If errors are made with accounts receivable and I am not properly compensated for work I have done, what steps can be taken to remedy the situation?
This requires a discussion with the owner dentist and/or office manager. This may be outlined in the agreement. By keeping up to date with his/her own financials and accounts receivable, the associate and principal can minimize errors in the long run.
Do I have the authority to discount fees for a patient?
This will vary from practice to practice and should be discussed with the owner/principal dentist. Some practices may give associates some freedom but, this is not typically the case. Treatment at no cost should be done on the associate’s time not during the practice hours. The cost of the assistant is the responsibility of the associate.
Are there billing or treatment quotas that I must reach in a month?
This will depend on the particular office and should be discussed openly with the owner/principal dentist. At times, dentist owners after a sale who are transitioning to an associate role may be given a billing quota. But remembers that all treatment should be based on patient need and not on the need to make a certain quota for a month.
Retreatment of Patients & Holdbacks
At times, disputes may arise between the principal and associate when treatment rendered by the associate needs to be redone later. The contract should contain specific language that states that the associate is responsible for the quality of his/her work and any work that must be redone will be at the associate’s expense.
Additionally, other specific provisions should be included which address situations where work needs to be redone after the associate is no longer at the practice. In these situations, the principal will usually perform the treatment and bill the associate for the cost of having to redo the work.
What is hold back pay and what is fair in terms of hold back pay?
At times, the principal dentist may wish to hold back monies that are owed to the associate once he/she leaves the practice to offset costs that may be borne by the principal if some of the work provided by the associate needs to be redone. This must be outlined explicitly in the associate agreement and to ensure that the hold back amount is reasonable. The unused portion of the hold back pay must be returned to the associate within a reasonable period of time to the associate and should likewise be stipulated in the contract.
The hold back pay period may vary from office to office. The usual time frame is approximately 3 months (90 days) and anything beyond that may be considered unreasonable.
What if there is a patient complaint filed against me after I’ve left the practice?
If a claim is filed against you, it is still your responsibility and this will be a regulatory matter not an office matter. Unfortunately, the practice is also involved in this situation as the patient chart usually resides with the practice even after the patient has left.
How do I settle a patient claim if I’ve been paid for the treatment already by the owner?
This will need to be discussed and/or negotiated with the owner and potentially the regulatory authority.
The Associate Agreement usually includes a clause stating that the associate will not use or disclose any confidential information regarding the patients, employees, principal dentist as well as the operations and financial information of the practice upon termination of the contract.
Non-solicitation & Non-competition
While working within the principal dentist’s practice, it is assumed that the associate will interact with the staff and patients of the practice. As such, there is a potential risk that when the associate leaves the practice, he/she may take some of the staff or patients with him/her to the new practice. Additionally, there is a risk that the associate may set up a practice in close proximity to the principal dentist’s practice and therefore be in competition with the principal. To avoid these scenarios, non-solicitation and non-competition clauses are added to the Associate Agreement.
The non-competition clause restricts the associate from practising within a certain geographical radius of the principal’s practice for a specified amount of time. The non-solicitation clause prevents the associate from soliciting staff and patients of the principal after the associate-principal relationship has been terminated. Consideration should be given to the restrictive covenant even during the trial period.
What is a restrictive covenant?
The restrictive covenant, or non-competition clause, prevents the associate from practising within a prescribed geographic radius for a specified period of time from the termination of the associate agreement. The purpose of this clause is to protect the principal dentist’s goodwill, patient base and referral network.
At times, the restrictive covenant may be prohibitive to the associate finding other work after the end of the agreement. As such, the associate should consider the impact in the short- and long-term of the restricted covenant before signing the contract.
How long is a restrictive covenant valid? I have heard it can be extremely large in terms of radius – how far is too far?
These non-competition clauses are usually scrutinized closely by courts so that the legitimate interests of the principal are balanced with the legitimate interests of the associate who must earn a livelihood as well as the public’s interest of accessing dental services. The radius and time of the restrictive covenant are influenced by the community including the population base.
How can the restrictive covenant be enforced?
A non-competition clause can be difficult to enforce and must meet certain tests.
- The principal’s proprietary interests are protected
- The restriction is reasonable with respect to time frame, geographic scope and the activities it restricts
- The associate is not restricted in earning a living
- The clause’s terms are clear and certain; and
- The clause is reasonable with respect to the public’s interest.
A non-solicitation clause, however, is often more enforceable in a contract as it only prevents the associate from soliciting the principal’s patients and employees for a reasonable amount of time after termination.
What if I leave to open my own practice and some of the patients or staff want to leave with me?
Patients and staff are free to leave and follow the associate. However, as long as the associate has not solicited either, he/she would not be in breach of contract.
An Associate Agreement with a fixed term will end on the termination or expiry date unless it has been renewed before the expiry date. The contract should include a termination clause that clearly outlines how the agreement can be ended including the notice period to end the relationship, any circumstances which justify immediate termination of the agreement and the rights and obligations of each party upon termination. The contract may also outline provisions in the event of the principal’s death or retirement while the associate is providing care to patients in the practice.
If the associate is an employee, the principal must follow the legal requirements for termination of the employee relationship as dictated by each province.
If I want to resign as an associate, how much notice do I need to give?
The Associate Agreement should include language that allows either party to end the contract before its term ends by providing the other party with written notice. The amount of time to give notice should also be outlined in the contract. If there is a longer period of notice, it allows the patient to transition from different providers and allow for the continuity of care.
What termination clauses are fair to me?
If the associate is engaged in serious misconduct or materially breaches a provision of the contract, the principal should have the right to terminate the agreement without any payment in lieu of notice or notice.
The agreement should also state that upon termination, all of the files, computer disks, confidential information, patient charts and files, and documents pertaining to the practice remain the property of the principal and must be returned by the associate to the principal.
Contract for Services
The Associate Agreement should clearly state that the associate is not an employee but an independent contractor. In the event that the associate is an employee, he/she may be entitled to various benefits that the principal dentist may provide including: group insurance, pensions, RRSP contributions, car/cell phone allowances. However, if these benefits are provided to the associate, he/she may be considered to be an employee of the principal dentist.
Statutory Payments & Remittances
Does the Employment Standards Act apply to me?
Because the associate is usually an independent contractor, it is his/her responsibility to remit payments for service and income taxes and any other amounts related to provision of contracted services. If the associate employs any staff, the associate will also be responsible for statutory deductions and remittances on behalf of the staff.
The language of the associate agreement should specify that the associate must make his/her statutory payments and remittances and should indemnify the principal from any assessments or penalties that are the responsibility of the associate.
In the event that the associate is employed by the practice, the principal dentist will be responsible for his/her payroll and tax deductions.
The issues of workers’ compensation coverage can be tricky. As an example, WorkSafeBC labels certain types of independent contractors as “workers” for the purposes of the Workers’ Compensation Act. Therefore, if the associate has no staff and provides dental services only at the principal’s practice, the associate is likely to be considered a “worker”. In this situation, the responsibility for paying the associate’s premiums lies with the principal. Where this occurs, the principal is responsible for paying the workers’ compensation premiums for the associate. This should be stated clearly in the agreement. In contrast, if the associate employs staff and/or provides services at other dental offices at the same time as well, then he/she may be able to register with WorkSafeBC as an independent operator or as an employer. In this latter situation, the associate would pay the premiums.
Disputes. Agreements also contain a “governing law” clause that outlines how disputes will be resolved. Different provinces (and countries) have different laws which can impact how the agreement is interpreted. The contract may also state that both parties must participate in mediation or binding arbitration to resolve disputes.
Jurisdiction. This clause is similar to the governing law clause, but outlines where any legal proceedings will occur. Associates will prefer that any litigation takes place in their local jurisdiction to avoid incurring travel costs.
Insurance. The contract should also clarify what types of insurance that both the practice, principal dentist and associate dentists should carry and whose responsibility it is to pay for the insurance.
Hold Harmless. The contract should also include a clause which releases the other dentist from any claims as a result of malpractice or patient damages on one of the dentists. The dentist who provided the care and work will be solely responsible for paying the claim.
Legal Recourse. Each party is entitled to apply to the courts to seek injunctions, remedies or damages if the other party breaches the contract.
Is there an opportunity to buy-in or buy-out the practice in the future? Will I have first right of refusal?
At the outset of the working relationship, the principal and associate may outline the details if the principal decides to sell the practice. This may include:
- Option to buy the practice or have right of first refusal
- Special provisions or termination entitlements if the associate agreement is automatically terminated upon sale of the practice
- Assignment of the associate agreement to the purchaser
This clause allows the associate to buy the practice if the principal receives a bona fide offer from another purchaser. In this way, if the associate does not match or exceed this offer, the principal may sell to the other purchaser.
As an associate, it may be better to own a more equal share of the practice rather than 25% as a starting point to help equalize and set up a better relationship. Unfortunately, at times, many early career dentists neglect buy-in relationships and they do not work over the long-term. However, if there is a serious discussion and it seems feasible, both parties should seek legal and accounting advice to set up appropriate contractual and financial structures for themselves.
Can I treat my significant other/spouse, siblings and parents for free or a discounted fee? Can I give my friends a discount?
It is reasonable to request that a limited number of friends or relatives be treated by the associate on his/her own time. This list of patients should be included in the contract for transparency.
Associates may also want to do their own due diligence on the dental practice and dentist that they are considering working with. Consider the reputation of the dentist, team, and the office’s reputation within the community etc.