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.
There are many reasons doctors bring on associates to help in the practice. You may be so busy you can’t see straight and need some part-time or full-time help. You may be looking to wind down your clinical practice, but want to keep your ownership over the business you built, or you might be an entrepreneur, and looking to move on to build another practice.
Whatever the reason, you want to ensure that the associate will increase your practice’s profitability, not destroy the business you have built. Therefore, there are a few things to keep in mind when bringing on an associate doctor.
Our previous posts in this series looked at different ways you can structure the exchange of assets in a practice purchase agreement. This post will look at a different topic: how non-competes can be structured so that a buyer can preserve the value of his investment in the practice, while a seller can continue to pursue his career without overly burdensome restrictions.