Dentist Has Questions About Creating Associate Agreement

I am in serious discussions for the first time in my life with a new dentist who wants to move to the small town I practice in, and work with me. Thank God, as I am and have been swamped for years. He is willing to come on a trial basis, and bring his family. My practice is in a town getting ready to grow dramatically, and is very technologically advanced, so I will have alot to teach him, which is, frankly, probably one of the reasons he wants to come.

I like him and I think this could work but I have absolutely NO experience in this. I know we need a written agreement but I have no idea what is fair to him, how compensation should be structured and how a buy in should be managed….input would be appreciated so I can start this process fairly for both of us.

You should consider hiring someone that helps owners with associates and buy-ins to help you though the process, not to mention a dental specific attorney for the contracts. some steps to consider:

1. In addition to the base compensation, what professional expenses will you pay, which professional expenses will you expect them to pay?

2. Who pays for health insurance? The malpractice? If it is split, how?

3. If you have a retiremet plan, how will that impact your cost of the associate?

4. How many days initially do you went them to work? What hours? Any specific days? What happens as they get busier?

5. How “new” is the dentist? Do they have any track record on their production ability? If so, estimate that based upon a daily production figure and estimate what that means to your practice in terms of collections.

6. How will it impact your hygiene department? Maybe it won’t.

7. Will you be ok cutting back your schedule? How much ?

8. Do some cash flow projections to see how it will impact you. Prepare a best case & worst case scenario. Consider the additional costs: assistants, front desk, supplies, lab, etc…

9. If buy-in is to be considered, what will be the valuation date? Should there be some increase in that price for normal growth NOT associated with the new doctor?

10. What type of entity are you now & should you consider alternatives based upon another doctor in the practice with a potential buy-in?
I figure these 1st 10 steps will keep you busy for now. The first several steps can be the basis for a letter of understanding that you & the associate should agree to. This will be given to your attorney for the employment agreement.
This first appeared on Dentaltown.

Send your questions to Tim Lott, CPA, CVA at

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