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.
Owning a practice right out of dental school can be a daunting endeavor. Although dental school may prepare you for clinical practice, often little or no attention is paid to the administrative responsibilities of running a practice. In fact, a 2013 survey conducted by the American Dental Education Association (ADEA) showed 95% or more of graduating dental students believed that their education adequately prepared or well-prepared them in the areas of patient evaluation and diagnosis; radiology; and operative and restorative dentistry, whereas less than half believed their education had prepared them for practice administration.
June is graduation season for new doctors in Arizona. While graduating from medical or dental school is an enormous achievement, it may also be a time of uncertainty as you transition from the academic setting into your new career in the professional world. The following are some legal and practical tips that might help you as you embark on your career.
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.
If you own your own medical or dental practice, but not the building in which it is located, you have likely encountered the dreaded commercial lease. The commercial lease is legalese in its purest form: 25 or more pages of byzantine, sometimes incomprehensible lawyer-speak that can make even some lawyers’ heads spin. Although people can (and actually do) write entire books on dissecting and explaining the commercial lease, and although you should always have your commercial lease reviewed by an attorney, below are some key concepts you should understand when entering in to a commercial lease:
Whether you are buying or selling a dental practice, we recommend making a timeline and a checklist to make sure that everything is in place for the transition. You should consult with your legal and financial advisors to help address the specifics of your situation, but transitioning into a new practice involves several steps that have to take place over weeks or months, so you should map out a timeline and set goals for each stage in the process. Each of these steps has many individual components, and the following is simply an overview, but generally speaking, here are some of the steps in the process.
Most doctors know that, as part of buying a practice, they need to perform due diligence into the practice’s records to ensure they know what they are buying. However, determining what that diligence will entail can vary widely, depending on the circumstances. As a general rule, you should review at least the following:
At this time of year, many people take a moment to reflect on the past year and plan for ways to improve in the new one. In addition to traditional resolutions about personal health, there are some resolutions you should consider in your practice as well.
In our previous post, we looked at several considerations to take into account when opening and building a practice. Below are some additional thoughts on some of the challenges facing start-up practices.
Often, the biggest sources of tension in forming and operating a practice revolve around money. Even when you go into business with good friends, resentment can build when one of your partners is perceived to not be pulling his weight, or taking too much out of the practice. Left unchecked, these resentments can become toxic and can destroy a practice. The best remedy for this is to have a frank discussion before the practice is formed, to determine what each partner intends to bring to the table, how expenses can be controlled, and how disputes can be resolved before they become distractions or worse.
Arizona law allows for considerable flexibility in how partners, shareholders and members create their practice entities. The following are some options to consider when preparing the shareholder agreement to divide the revenue and expenses.