When you are buying or selling a healthcare practice, even simple, straightforward transactions can become needlessly complex. Miscommunications and misunderstandings over key terms of the transaction can emerge, requiring the parties to spend unnecessary time, energy, and money on attorneys’ fees to resolve disputes. One of the best ways to avoid, or at least minimize, these misunderstandings is through a letter of intent, also sometimes referred to as a memorandum of understanding or a term sheet.
When hiring associates, doctors understandably want to limit costs as much as possible. One of the ways in which doctors often try to reduce costs is by categorizing associates as independent contractors, rather than as employees. While classifying an associate doctor as an independent contractor is an appealing option, there can be substantial consequences for improperly categorizing an associate as an independent contractor when they should be categorized as an employee.
Many dentists, particularly doctors who have recently graduated from dental school, choose to become associates at larger practices, rather than open their own clinic or partner with another dentist. Structured correctly, this can be a mutually beneficial relationship, under which the owner-doctor can increase his or her practice’s client base, revenue, and profitability, while the associate doctor can gain more experience, both in providing direct patient care and in the practical operation and administration of a dental practice, which he or she can then use as a future practice owner.