The who, what, when and how of contract negotiation

Your long-awaited dream is finally within sight. You’ve been offered a promising job! You’re just one signature away from a celebratory dinner. But don’t reach for your jacket just yet. No matter how excited you may be to seal the deal, there’s one more crucial step: contract negotiation.

The first contract you receive isn’t necessarily the one you’ll sign. Most employers expect some back-and-forth after they deliver your employment contract. These lengthy documents are written by attorneys paid to protect an employer’s interests first.

Before you sign, you should take time to read and understand what you’re agreeing to. That way, you can identify any clauses that are vague, missing or not in line with your best interests.

Step 1: Getting ready

When you’re contemplating a job, it’s important to weigh your priorities. What do you and your family need and want from the arrangement? Your priorities may have shifted throughout your medical journey, so if you haven’t revisited them recently, now is a good time.

Clarify your vision

You probably have some ideas about what you want your career to look like. Now is the time to make sure your job offer lines up with the picture you have in your head. Take these factors into consideration as you do:

Location. Does the job require relocation? Is that feasible for you and your family? Do you plan to stay in the area, even if you don’t stay at this job? If so, review any restrictive covenant carefully as it may limit your future mobility.

Finances. How much debt do you have? Can you afford to move? Consider negotiating for loan forgiveness, a relocation stipend or a signing bonus to help offset these burdens.

Lifestyle. What kind of schedule are you looking for? What other responsibilities do you need to keep in mind? Be sure you understand your expectations in terms of days and hours worked.

Other endeavors. What else is on your plate, both professionally and personally? Do you have an entrepreneurial nature and want to start a side business? Do you plan to do other medical work on the side? Take note of any restrictions limiting such activities.

Career direction. What do you hope to be doing in five or 10 years? Is this job a good steppingstone toward that goal?

Ongoing learning. What are you interested in learning more about? Education doesn’t end with medical school, so make sure this job supports continued learning through mentors, educational opportunities or other avenues.

These considerations will help you determine whether this job and this contract fit your needs. Just as you planned out your education and residency, you now need to map out your career to reach your professional goals.

“[You] need to be happy with the scope and trajectory of your individual practice,” advises R. Bryan Butler, M.D., a surgeon at Orthopaedic Medical Group of Tampa Bay. “For instance, as a shoulder-and-elbow-trained specialist, when I chose a group or location, I wanted to make sure that the majority of my practice would entail shoulder and elbow patients.”

Ramp up your knowledge

As you were winding down your academic years, you probably received plenty of career guidance to land a residency or fellowship or craft your CV and nail your interviews. However, young physicians don’t always receive much advice about employment contracts or contract negotiation.

The good news is just a few hours of research can quickly get you up to speed. Search online for sample contracts, ask your medical schools for resources, and reach out to past mentors or professors for help.

Some employment issues—such as insurance costs and regulations—vary greatly by region, so tailor your efforts to your location. Consider your specialty, too. Supply and demand for specific types of physicians play a big role in salary, perks and your overall leverage.

Finally, consider your background, skills and education. What do you bring to the table, and do your credentials give you an advantage in negotiations?

Line up supporting resources

Employers have plenty of legal minds on their side. It wouldn’t make sense for you to go without. Before you sign a contract, have a lawyer review it. Choose an attorney who is familiar with physician employment contracts. If you need help finding someone, check with alumni associations, nearby medical schools or colleagues for recommendations.

“M.D.s do not usually have training in business and law,” says Scott Goldsmith, M.D., president of Orthopaedic Medical Group of Tampa Bay. “It’s prudent to have [a lawyer] mark up the document to point out possible areas of concern for you. There are always points of the contract that need to be addressed further, so if the attorney sends back a contract without any red marks, it would be wise to seek alternative legal advice.”

Your lawyer will charge a fee, but it’s money well spent. Legal review can help improve your job satisfaction and prevent conflicts during or after your employment. Plus, you may even recoup the cost directly or indirectly if your lawyer helps you negotiate better terms.

In addition to seeking legal guidance, you should also tap into your medical network for their knowledge.

“Talk with other doctors you trust, others finishing up residency or fellowship proctors [with whom] you established a relationship. You can do this without divulging specifics. Speak in broad strokes,” suggests Goldsmith. “Have an intelligent conversation about what’s reasonable, what they’ve been seeing, without revealing any personal details.”

Step 2: Getting down to the nitty-gritty

It may be the last thing you want to do at the end of the day, but don’t put off reading your employment contract. Whether it’s a page-long letter or a hefty 30-page document, it’s well worth analyzing. Don’t just expect your lawyer to read it for you. This review should be a mutual exercise.

“Remember that [your] attorney is being paid to look after your best interests, but at the end of the day, you alone get to decide if you believe the contract is fair for you,” Goldsmith says.

What am I looking for?

Gather some sticky notes and highlighters as you prepare to mark up the document. Flag things you don’t understand or don’t agree with. Make note of anything you plan to research or ask colleagues about. Look also for what’s missing.

Sometimes, informal agreements you discuss in an interview don’t find their way into the contract, and you’ll need to have them on paper if you want them enforced.

Be on alert for vague language or sparse descriptions, such as “perform duties as required” or “participate in call rotations in compliance with the group.”

These open-ended statements put no limit on what can be asked of you, and they don’t provide benchmarks you can use to measure your performance.

“Get the job expectations in writing as much as possible—specifically with certain areas, such as call expectations, weekly clinical work responsibilities and even how add-on cases are handled,” suggests Goldsmith.

“As the new hire, will you get access to the same work as the others? Is there a true collaboration among the surgeons, or is it more of a pyramid scheme?”

Don’t skim or give a half-hearted effort. Just as your lawyer’s copy of the contract should come back with notes, your own copy should be marked up when you are finished with it.

What’s off limits?

While you shouldn’t hesitate to voice any and all concerns you identify, be aware that some areas may be out of your employer’s control.

“Everything is potentially negotiable. However, for large hospitals or practices, there may be a standard agreement with little wiggle room,” says Houtan Chaboki, M.D., president of Potomac Plastic Surgery in Washington, D.C.

For example, health, dental or vision insurance coverage likely can’t be changed. Similarly, he adds, “The noncompete clause is less likely to be negotiable.”

“[Other] areas, such as scope of practice or schedule management are more likely to be negotiable. For example, the physician may only want to see certain types of patients on specific days,” explains Chaboki.

“Also, [hold off on asking] how many operating rooms you will have,” Butler says. “This takes time to develop, and it is unlikely that a group is going to be able to guarantee high surgical volume and multiple rooms right off the bat.”

One more area to keep quiet about: phone bills and mileage reimbursement. “These are usually reserved for partners,” says Butler.

If you have an impending major life event, such as a wedding or new baby coming up, it’s better to raise questions about it now, rather than request time off right after you come on board.

A word about salary

Salary is always a hot topic in contract negotiations, but there’s not always much wiggle room. “At my private practice group, all our new hires straight out of fellowship have the same starting salary,” Butler says. “Most groups are not going to want to negotiate much on salary until the new hire has proven him or herself.”

“There are instances, however, where someone might have a unique skill set or has longer experience or serves in area that is in desperate need for someone right away. If these or other factors are present, then there is more room for negotiation,” Butler adds.

There’s a wide range of compensation models. Physicians early in their careers usually receive a fixed salary, possibly with a productivity bonus. More experienced physicians might be offered a more variable salary. It’s generally difficult to negotiate a different compensation model than the standard one your employer offers, but it’s still important to understand it.

Make sure your contract fully explains your compensation, how long it is guaranteed and any external factors that may affect your income.

Partnership potential

You might have your eye on becoming a partner, or you might just be happy to have landed a good job. Either way, now is the time to get the details in writing. “What are the criteria necessary to become a partner?” Goldsmith suggests asking. “When are you eligible to start accruing equity? What are the requirements based on: RVU, collections, number of years in the practice?”

Even if you don’t aspire to partnership, be sure your contract supports whatever type of professional growth you have in mind.

Can I streamline contract negotiation?

As you’re plodding through your contract, you may begin to wonder: What’s the most important area to focus on? That answer varies greatly from one physician to the next. A doctor with a young family may place a premium on keeping regular hours, while another physician may seek complex clinical cases, and yet another may be focused on benefits.

Think back to whatever goals and aspirations you identified at the outset, then consider how this contract lines up with those. If there’s anything that will influence your future or interfere with your happiness, put it on your list to discuss.

Step 3: Head to the table

You’ve pinpointed areas to discuss, soaked up knowledge from your attorney and trusted colleagues, and done your own research. All that’s left is a few conversations with your future employer. Easier said than done, you may be thinking. But don’t let nerves or the voice in the back of your head deter you.

It’s up to you

Your lawyer is a helpful resource for identifying points of contention and explaining standard terms. But beyond that, it’s up to you to take the reins and make sure you’re satisfied with the contract and the job itself.

“Ultimately, your lawyer will not be working with your [colleagues] and future partners. You will. The importance of representing yourself is paramount,” says Goldsmith.

Advocating for yourself might feel less intimidating with a buffer, but direct communication is much more effective. Avoid relying on email or using a go-between. Instead, phone calls, Skype or Zoom sessions and face-to-face meetings are the best methods.

Don’t rely on memory

Don’t hesitate to bring notes along with you to meetings or have them on hand if you’re talking via phone, Skype or Zoom. That way, you can refer to all the points you want to cover—and your ideal outcomes. Make note of any supporting data you’ve found, such as average local starting salaries for your specialty.

Be flexible

Not every issue is of equal magnitude. You’ll have to compromise in some areas to get what you want in others.

Organize your requests by priority: 1) factors that affect whether or not you’ll accept the job in the first place, 2) important concerns that you can afford to be more flexible about, and 3) perks that would be nice to have but not necessary. If you’ve prioritized ahead of time, you’ll be ready for the necessary give-and-take.

Remember to be open-minded throughout the discussion. Listen to other ideas, make notes, ask questions and don’t rush to agree or disagree with anything until you’ve had a chance to digest everything.

Don’t be pacified

Ideally, your negotiations will be professional yet friendly. But be careful. Friendliness can be a way of dismissing your concerns.

You don’t want empty reassurances, such as: “Oh, don’t worry about that. That’s never been enforced!” or “That’s just our lawyer. She loves her legal language.” It’s tempting to smile agreeably and take this on good faith, but at the end of the day, if something isn’t in writing, it’s not enforceable.

Negotiations require a fine balance of persistence and politeness. Gently push these friendly reassurances a bit further by saying something like, “That’s good to hear. Given that, can we omit it from (or add it to) the document, please?”

Keep it in neutral

You’re likely to experience an array of emotions during negotiations. You may feel intimidated by your prospective employer and their lawyers, worried that you are asking too much, or even offended by a comment someone makes. Regardless what’s going on inside your head, try not to appear ruffled or get heated.

Remind yourself that this is just business. Your employer is protecting their own interests, just as you are protecting yours.

Even if you realize mid-negotiations that you won’t be taking this job, don’t do anything you might regret. If you lose your cool, that reputation might precede you elsewhere.

When to walk away

If your employer won’t—or can’t—accommodate one of your key points, you have a decision to make: Do you accept their terms or walk away?

“Ask yourself if you can live with that specific term,” suggests Chaboki. You may know the answer right away, or you may need some time to weigh the pros and cons.

If things don’t shake out the way you want, you can always ask to revisit the issue in a few months, once you’ve proven yourself as a valuable employee. But make sure any arrangements to renegotiate terms are added to your contract in writing. Verbal promises are easily forgotten.

Of course, some issues are too important to put on hold. If you’re not comfortable waiting to revisit an issue later, it may be time to part ways. “Something that I learned from my father in regard to negotiations is that if you are going to negotiate hard, you have to be willing to walk away,” says Butler. “What I have added to that over the years is that you should not be willing to walk away unless you have a plan B.”

Contract negotiations are never easy. Remind yourself that this is just one more step in the process of landing at your dream practice.