Well, hello, everybody. Welcome to the AUGS fellow webinar series. I'm Dr. Erin Metzold and I will be the moderator for today's webinar, which is understanding physician employment contracts, presented by Mr. Steve Kaufman. Mr. Kaufman will present for the first 45 minutes and in the last 15 minutes of the webinar will be dedicated to question and answer. So it is my pleasure to introduce our speaker, Mr. Stephen Kaufman, who has been a lawyer for 35 years. He advises doctors in all aspects of their practices, including employment contracts, partnership buy-ins and exits, and employment disputes and disciplinary board matters. Mr. Kaufman is an author and frequently lectures to doctors nationally, regionally, and locally at hospitals, professional organizations, universities, and various private groups. Mr. Kaufman is a former adjunct professor of law at Stevenson University and received his JD from Cornell University and his BA in State University of New York in Albany. Mr. Kaufman lives in Baltimore, Maryland with his wife, Rona, who is a pediatrician, and their dog, Diesel. So before we begin, I'd like to review a few housekeeping items. Keep in mind, this webinar is being recorded and live-streamed. Please use the Q&A feature of the Zoom webinar to ask any questions of Mr. Kaufman during the talk. And then we can use the chat feature if you have any technical issues, and AUG staff will be monitoring and can assist with any issues. Without any further ado, Stephen Kaufman. Thank you, Erin. Thank you very much. Hello, everybody. Nice to be here. Let me see if I can share my screen so we can make this work right. Give me a second. Let's see what we got going here. And don't peek at that. Let's see. Come here. From slideshow, from the beginning. Ah, there we go. Okay. So there we go. That's me again. I represent you guys for a living. I have moved about 5,000 doctors' employment contracts into jobs. So whether you're getting your first contract or your fifth contract, I help move you from job to job to job. I put people in. I take people out. I put you in. I take you out. It's what I do. And as Erin said, my wife's a pediatrician. She runs her own practice. So when I come home at night, I get to do a little bit more legal work for doctors. Today, my assignment is to teach you guys a little bit about the employment agreements that you've either already got that you'll be replacing one day, or if you're a fellow, the ones you'll be getting when you're all done with your training. Before we get going here, I want to tell you a little story. Mick Jagger. I'm sure you all recognize Mick Jagger. What you might not know about Jagger, though, is that he went to the London School of Economics where he studied business. Very good businessman. There's a reason the Rolling Stones made all that money, and it's not just the music. It's because Jagger really understands what he's doing. He was at a party once, and a woman comes up to him and says, Mick, Mick, Mick, I got to know, what comes first when the Stones write a song? Is it the music or is it the lyrics? The music or the words? What comes first? And Jagger thought about that for a second, and he said, the contract comes first. You got to have a contract before you go to work. The contract comes first. Really important piece of paper. Your contract, when you get it, it's going to be one of the most important pieces of paper you've ever signed in your life. And again, if you're going to have a new one, you know that. If you've never had one, it's going to be the most important piece of paper you've ever signed. It governs what time you get up in the morning, what time you go to bed at night, what you do on your weekends, how much money you make this year, next year, for years to come. It'll talk about where you can take in control, where you can take your next job after that one crashes. And sometimes it talks about what happens to some of your money when you die. Really important. I'm going to take you through it. I'm going to show you what your business family interests are in your contract, what your employer's interests are, how you guys butt heads with one another, and what some of the compromises are to help you get signed and have everybody be reasonably happy. Now, before I take you through a contract, I want to give you three rules. If you can remember these three rules and my name, you will be fine. You've got to remember these three rules. I don't have time to teach you everything there is to know about an employment contract in 45 minutes. I've been doing it for 35 years and three years of law school. But I can give you three rules that'll really help you through. So here's rule one. Rule one is your contract's not in English. It's not in English. There's two reasons it's not in English. First, you went to the wrong school. Should have gone to Cornell Law School with me instead of going off to medical school. You went and learned the secret language of doctors. You needed to learn the secret language of lawyers. You don't know legalese. That's a problem. Not your biggest problem. At least, I don't think most of the time it's your biggest problem. Your biggest problem is you don't know what's, you don't know enough about the world, particularly if you're a fellow, to kind of match your contract against your life. Let me give you an example of what I mean. Here is a typical contract up on top. You're going to be available for call 24-7 on a schedule to be set by the boss. Very common, very open-ended. The boss gets to do with you what they want. I fixed it down below. Read that through. Decide for yourself, did I fix it? If I fixed it, how did I fix it? Kind of get that set in your head a little bit. Now that you've thought about how I fixed it, I'm going to tell you I didn't fix it. These two things are identical. They are absolutely identical. The bottom one has a I haven't been around the block issue in it, and it's got an I went to the wrong law school issue. Take a peek. See if you can figure out what it is. If you said to yourself, call will be shared equitably among all doctors, lots of people read that as if there's eight doctors, I'm one in eight. If there's six, I'm one in six. If there's four of us, I'm one in four. Lots of people read it that way. It's perfectly natural. It's wrong, though, because what you've read is call will be shared equally. Equitable is what the boss thinks is fair. It's what the boss subjectively thinks is fair. The boss has been doing this for 30 years. You've been doing it for 20 minutes. It's fair that the boss takes no call and you take double call. That's fair to the boss. It's like I have a younger sister two years younger than me. When we were kids, you'd be dividing the Halloween candy, and I'd be dividing, and it would be one for you, Carolyn, two for me. One for you, two for me. To me, that was equitable. Doesn't mean equal. The second problem here is the wrong law school problem is the word employed. Congratulations if you got it right. Well done. The word employed. What does that mean? Well, first off, you might be other associates. Other people might be independent contractors who aren't employees. If everybody else is an independent contractor, you're by yourself. More subtly, depending on the kind of company you join, and I'm assuming now private practice and not joining a hospital, different issue for a hospital, but if you're joining a private practice, the kind of company it is can determine what it means to be an employee. In a lot of states, there are kinds of companies where the owners are not employees. For example, I'm sitting here in Maryland. A lot of medical practices are LLCs, limited liability companies. The owners of limited liability companies are not employees. They're members. They're taxed differently. They don't get a W-2. If you join a company that is an LLC or the equivalent of that in another state, the initials change. The concept is the same. You may have joined a practice where the owners are not in the call rotation. The contract says it, but you don't realize it. It's not in English. That's rule one. Now, before I leave rule one, I have been frequently asked, hey, Steve, I'm reading my contract. What are the magic words I should look for? What are the words that pop up over and over and over again, like equitable or employed? There are some others that we'll see as we go through. What are the words to worry about? Well, I thought about that a lot. I'm going to give you the answer to that question. There is an answer, and here it is. Take a look at that. The answer is there are no magic words. You have to understand every single word, every single comma. There's no substitute for complete understanding. Here, the comma is the difference between eating dinner and cannibalism. It's a life or death difference. In your contract, it's not life or death, but it swings money. There's no substitute for completely understanding it. There are no magic words. That's rule one, not in English. Rule two, rule two is the contract was written by the employer's lawyer, your employer's lawyer, to protect your employer, period. It is not meant to be fair. It's not even meant to set out the deal that you've cut because they never match the deal. They never match what you've been told. What you need to understand about lawyers is that we have an obligation to look out for our clients first and above all else. That means the employer's lawyer is looking out for the employer's interest above all else. If I'm helping you, I'm looking out for you above all else. If the employer's lawyer is looking out for the employer, that means that they put things in the contract that are just bad for you. If you get in a lawsuit with your employer, you get to pay your employer's legal bills. If your employer gets sued for something you did, you get to defend the case. Even if they have insurance, you get to pay for it, called indemnification. You see it more and more in contracts. It's loaded up to protect the boss so that when things change, when COVID hits and you got to reduce pay, you got to lay people off, the boss doesn't get hurt, the hospital doesn't get hurt. They can lay it off on you. If I took every contract I've ever looked at, and remember, I've done them about 5,000 of them, and I put them on this scale, where 10 is awesome for you, and 0 sucks for you, and 5 is a fair, neutral contract. Every contract you get from your employer will come in somewhere between 5 and negative 5, and your job is to push it back towards 5, which brings me to rule 3. I can't see y'all, and I don't know whether you're oohing and aahing, but if you didn't go ooh or aah, you need to check your compassion. Just saying. Rule 3, most important rule, it's all negotiable. It's all negotiable. This is by far the most important rule. Your employers don't want you to do it. It's all negotiable. If you don't want to negotiate, you've got to negotiate. There's three great reasons to negotiate. First one is you'll get more stuff. You'll get more money, more vacation. You'll be harder to fire. You'll get a smaller non-compete. All the things we'll talk about, you'll get more stuff. There's only one rule when it comes to this, which is if you don't ask, you won't get it. You need to ask. It's the rare employer who puts their best offer on the table first. People leave room to negotiate. You don't get to be chairman of a department because you put your best offer on the table first. You lowball it a little bit to leave yourself some room to move up if the request comes. So you got to make the request. Now this is an important reason to negotiate, but I don't think it's the most important reason to negotiate. A more important reason is you'll learn more about the job. You'll interview, you'll shadow, you'll talk to people, you'll talk to ex-employees, you'll talk to current employees. You'll never really figure out what the job is until you're there. But the contract can be a nice framework for a discussion about what the job is going to be like. Let me give you an example. We had a doctor who was joining a multi-office practice. She was promised that she'd be working on the north side. That's where she interviewed. It's where she wanted to live. She liked the demographics of the place. She really liked the office contract. They promised her, you're going to work on the north side. The contract came in. It said she'd work at the north side or such other office as she might be assigned to. Well, that wasn't the deal. And we went back and said, well, let's make it. She'll work on the north side and such other offices as she agrees to. You need her agreement to move her. And they said, no. Well, I went to a meeting that I can't forget. It was at a round table, important. It was me, my client, the department chairman, and the lawyer for the hospital. And I asked, why can't we say north side? And it was like the vice presidential debates. If you saw them, I would ask one question and they would answer a completely different question that they like to answer better. But I don't give up easier. I was getting run round and round the round table. They're giving me the run around. I don't give up. And eventually, they conceded that they were losing somebody in the office on the south side of town. They thought my client would be a good fit. They wanted to leave it open to move her. She didn't take the job. She didn't take the job. If she hadn't negotiated, she would have signed, given up her other options, given up her other job opportunities, and signed on for a job. And then they would have been able to move her. And she would have been very unhappy, would have given up her other opportunities, would be stuck with a non-compete, bad move. Sometimes the best job is the one you don't take, but you got to ask questions to figure that out. Which leads me to the third reason you need to ask questions. Negotiating separates good guys from bad guys. Negotiation, particularly over money, reveals character. Sometimes you'll talk to the boss, and they'll listen to you, and they will be reasonable, and they will accommodate you, and they'll make changes. And even if they don't, they'll politely listen to you, and they'll recognize and acknowledge your concerns. On the other hand, there's a certain percentage of employers who will try and bully you or will patronize you, pat you on the head. You want to flush that out before you sign, not afterwards. I mean, if they're going to be that way before you sign, when they should be on their best behavior, imagine what it's going to be like after you sign if they try and bully you even before you work for them. Tell you a quick story about that. Used to tell a story about a local hospital, but it got supplanted by this one because I'm having trouble thinking of a more outrageous sort of story. I had a female doctor. That's important. She was a female. A contract came in, and she sent the employer, the male employer, the male boss, an email setting out her concerns with the contract, some of her asks, what she wanted to have changed, and why. And it was a very polite, professionally written email, and very reasonable. And I know this because I ghost wrote it. And the response came back. I can quote this verbatim. I don't need to have it in front of me. I'll never forget it. Here's what he said, quote, you're so cute. No, really, you are so cute. Don't worry about this stuff. It'll be okay. Well, you can't run away from a guy like that fast enough, which is exactly what my client did. But if she hadn't negotiated, she wouldn't have figured that out. You sign on with a guy who's, at best, a jerk. Gotta negotiate. Now, before we leave Rule 3, we need to address the psychology of the negotiation, particularly if it's your first. So if you're a fellow coming out, and you're looking for your first job, this is particularly important. Because the psychology of your first job says, don't negotiate. It says, don't negotiate. Because you're concerned that you're going to be perceived as spoiled, as needy, as greedy, as pushy. And you're afraid you're going to lose the job if you negotiate. Goes through everybody's head to various degrees. When it goes through your head, ignore it. Please ignore it. It's irrational. You will not lose the job because you politely ask questions. You politely, reasonably negotiate. It just doesn't happen. The worst that happens, I've had it happen twice in 35 years. And both times, it was pretty outrageous. One of them was New Mexico, when non-competes were still legal in New Mexico. And they wanted a non-compete for the entire state. And I went to them, and I said, that seems big. And they said, doesn't matter. We gave the job to somebody else. Well, that's not ethical. To have two contracts out for one job at the same time is unethical. You don't want to work for those people anyway. Besides, they were crazy with the whole state. Moral is, it doesn't happen. 5,000 times, it doesn't happen. The worst that happens is they say no. And probably 80% of the time, no doesn't mean no. No is, let me see if I can get away with no. Let's see if I say no, if they will just go away and stop pushing. And if you push a little bit more, you can get some change. Now, I'm not saying you can't lose a job through negotiation. What I'm saying is you won't lose a job if you do it reasonably and politely. Now, if you go in like a spoiled jackass, demanding this and demanding that because it's your right, if that's the attitude you take, they might decide that they don't like your character. And they're going to tell you, never mind. That happens every now and then, probably for the best. If you're not going to fit in with them in a negotiation, if they don't like your style because it really is too pushy for them, probably don't deserve the job. Well, that's not true. It's probably best you don't have it because eventually it's going to crash. Now, before we leave this, I need to address a myth. And there's a persistent myth out there from employers that says that there is such a thing as a standard contract. Well, when you take a look at this myth closely, it's busted. There is no such thing as a standard contract. Let me repeat that. There is no such thing as a standard contract, not nationally, not regionally, not locally, not even within a particular employer. It is a myth perpetuated by employers to try and get you to sign things that aren't good for you. Look, this is so important. I'm going to have to trust you guys a little bit because I can't see you, but I need you to take an oath. Go along here with me. You are never going to forget this if you do it. Raise your right hand and repeat after me. Come on, I'm trusting you guys. Everybody do it. It seems silly. But if you do it, you will never forget this. I promise to be different. I promise to be unique. I promise to not repeat things other people say. Now, I don't know if I got you to do it because I can't see it, but I'm confident if I had you all in the same room, I get everybody to raise their hand and do that. And it's pretty easy to get people to be standard. Don't let an employer do it to you. It's funny. I hope you thought it was funny when it happens to you here. It'll cost you money if an employer does it to you. Look, you're not standard. Why would you sign the standard contract? Don't do, uh-oh, we don't need that, do we? Let's see if I can get rid of that. What did I do here? There we go. You're not standard. Why sign the standard contract? All right, so there's our three rules, right? It's not in English. It was written by their lawyer to protect them, not to be fair. And most important, it's all negotiable. All right, now let's go through the contract itself. Let me show you what's in it. There's four parts to a typical contract, how much money you make, how hard you work, how you get fired and quit, and in most states, the non-compete. You won't work in some geographic region for some amount of time. Let's do these one by one. Take a look at this fellow. And if you say to yourself, hey, that's Mark Twain, give yourself 100 points because that's pretty good. And Mark Twain said, Mark Twain said, when a fellow tells you it's not the money, it's the principle of the thing, yeah, well, it's the money every single time. Look, everything in your contract is about money. Every word is about money. What we're talking about here is the overt money. Comes in three flavors, salary, benefits, ownership. Ownership, if you're going private practice, obviously, not if you're going to a hospital. But everything else is identical. No matter where you're going to work, it's the same problems. First, salary. There's a couple different ways to get paid. The first, guaranteed, that's the low-risk way to get paid in a new job, particularly a first job. That's I'm going to give you $350,000 a year. You have a guaranteed salary. That's the way you want to get paid for as long as you can on your first job. The opposite way is at-risk, an eat-what-you-kill model. They come in two varieties. There are RVUs. That's typically a hospital model, relative value units. The government puts a number on all the procedures you do relative to one another. And then you add up how many numbers you've collected. So you do this, it's 10. You do that, it's 20. You get 30. You multiply that by some number. Maybe it's $50 or $60 an RVU. You multiply it out. That's your pay. Well, that's a lot of risk, right? Because if there aren't enough patients, you don't make any money. If the staff stinks, you don't make any money. If you go on vacation, you don't make any money. There's all kinds of reasons you don't make any money. You're really at risk. You need to ask a lot of questions if you're going to take a job that way. How many RVUs did the people like me do last year? How backed up is it to make an appointment? Because if they've got two people and there's two and a half practices, there's only a half practice there for you. So it doesn't really matter how many RVUs they did. There's only a half as many for you. You got to ask a lot of questions. In private practice, you might be collection-based. So that's, do we collect the money for the work you did? I'll pay you a percentage of it. I'll give you 40% of the money we collect for your work, something like that. That's really dangerous, right? Because now on top of, is there enough for me to do? There is the question of, will you collect your bills? And how much is this stuff really worth? So now you've got a whole new set of questions to ask, how good are you guys at collecting your money? Really complicated. If you get a formula of some kind, of any kind, treat it like your fifth grade math teacher and their fifth grade math student and say to them, show me your work. Show me your work. I want to see how many patients you think I'm going to see. I want to know what the most common procedures I'm going to do are and how many RVUs there are. I want to know whether that dollar amount you're giving me for RVUs is reasonable or is it something that's too low. A lot of questions. You've got to really understand the deal. The last way to get paid is a hybrid, and this can be a great way to get paid. So this is, I'm going to guarantee you your $350,000, and then I'm going to pay you $60 an RVU in excess of $7,000. And I'll pick the number. There's some threshold. And then there'll be some dollars that you get. There might be multiple thresholds. The dollars you get for each one might change. Again, if you get a formula in the abstract, you can't tell how much money you're going to make. You've got to really take a deep dive into what the formula really means. All right, at salary. Benefits. OK, so everybody can read. I'm not going to go through it. The general rule is the bigger the place you go, the better the benefits. If you're all about benefits, go to the hospital, not some small practice somewhere. I've highlighted malpractice insurance because that is a really expensive, important benefit that your employer sometimes wants you to pay for. Every place will give you insurance while you're working there. But some places want you to buy your own insurance to protect you for what you did on the job for claims that are made after you leave. It's called tail insurance, for those who are familiar, right? An extended reporting endorsement. And it can be really expensive, and your employer can want you to pay for it. You've got to understand that and try and get your employer to pay for it. Let me explain a little bit. There's two different kinds of malpractice insurance in general in the world. There's occurrence and claims made. Occurrence is the green here. It covers you forever. So if you work between 2020 and 20, well, now it's too late. I suppose I should fix this. You started a job in 2020, and you ended in 2022, and you're covered by claims made insurance. After you leave, if you get sued in 2023 for something that happened in 2021, even though the insurance was canceled, you're still covered. It's great insurance. It's the equivalent of what the hospital does for you now. If you're working for the hospital, it's like self-insurance. It's the same principle. You're still covered. Out in private practice, though, frequently your employer will buy claims made insurance. That's the gold. That only covers you for claims that are made while you're employed for things that happen while you're employed. So when you cancel the insurance, you have no more insurance. So if you get sued in 2023 for something that happened in 2021 in this picture, you have no insurance. And it costs about $400,000 to defend a case. That's just to win it. You need to have insurance. So what you do is you buy TAIL. That's the blue. It's a one-time payment you make. And you get insurance that says, hey, if you're ever sued for anything that happened under the claims made policy, we'll cover you. So if you get sued in 2023 for something that happened in 2021, you're covered. So if you put claims made together with TAIL, it equals occurrence. Well, your employer tries to get you to pay for the TAIL, and it can be expensive. About rule of thumb, changes from state to state, even county to county, but rule of thumb is about two and a half times the cost of your underlying premium. If your insurance premium is $50,000, your malpractice policy is $50,000, and it's two and a half times, that means your TAIL insurance is going to cost $125,000. Now, what I'm showing you here is that the underlying cost goes up every year. So the first year, it is relatively low because there are very few patients who can sue you. Year two, it takes a big jump because now there are twice as many patients, and then there are three times as many patients. And then eventually, if I had year five and six and seven here, it would level out, somewhat level out, because if people haven't sued you within those three or four years, they're never going to sue you. So year five replaces one, six replaces two, and the pipeline always has three or four years worth of people in it, and the price stabilizes. But the lesson here is the longer you're on the job, the more expensive TAIL insurance becomes, because it's two and a half times the underlying premium, give or take. So you want to try and get your employer to pay it. If they won't pay for it, there are a bunch of ways to shift it. So for example, the longer you work for them, the more of it they pay. So maybe if you leave in year one, you pay for all of it. You leave in year two, you split it 50-50. You leave in year three, your employer pays for all of it, something like that. There are other ways to compromise it, but the big point here is understand who's obligated to pay it, because you don't want to leave a job and then find out that, or worse, be fired, and then find out you have to stroke a really big check on top of it. Know what you're getting into when you're getting into it. All right, that is benefits. Oh, and I will say, let me go back here for a second. Women, don't be afraid to ask about maternity leave. Most places are just governed by the Family Medical Leave Act, which means if there need to be 50 employees, 5-0, for you to get 12 weeks unpaid after you've been there a year. So in a lot of states, particularly with small places, there's no need. They don't have to legally give maternity leave. Not a particularly enlightened thing, but it is the way it's still working here in this country. So don't be afraid to ask what maternity leave is. They can look at you and figure out that you might get pregnant. It's not a big secret. It's illegal to not hire you because you're a woman. So they can't not hire you because you've asked about maternity leave. I wouldn't worry about it. Better to ask now than be worried, than walk in pregnant, say, what's the maternity leave? And they look at you and say, what are you talking about? Iron it out up front. All right. Next, for those of you who recognize these gentlemen, this is Abbott and Costello. They are famous partners. So we're going to talk about partnership here. The general rule is nobody will offer you ownership partnership in your employment contract. It doesn't happen because your employment contract is dating and partnership is marriage, and they don't know you yet. You might not fit in. You might not make enough money. You might not want to be with them. But here's what you can look for in your employment contract. Here's what you want in there. How long does it take until you make me partner? Is it two years, three years, one year? What's the standard track? All right. Now they tell you it's two years. You want to know six months in advance of whatever it is. So if it's two years, you want to know it a year and a half. Are you going to make me partner or no? You're going to offer it to me yes or no. You don't want to know on your two-year anniversary that the answer is no because that's a crummy time to be looking for a job. You don't want to be looking for jobs in July and August. You want to be looking in the winter. That's when the openings are. And also, if the answer is yes, it gives you time to negotiate the contract, which is substantially bigger than an employment contract. Employment contract is about a dozen pages. A partnership agreement is more like three or four dozen pages. What's it going to cost? Not an exact dollar. You're trying to figure out whether they're reasonable or they have an inflated view of the value of their practice. If they want millions of dollars, if they want $5 million and you're going to make an extra $100,000 a year because you're a partner, that's probably a bad investment. Why would you pay $5 million to make an extra $100,000 a year? So you want to try and figure out whether it makes any sense. And most importantly, what's their history? Have they made partners in the past? If they are a revolving door where they hire associates, they grind them up, they spit them out, they hire a new one, don't expect anything to change. Look at what they've done in the past, not what they say. Look what they've done, not what they say. All right. Change of topics here. I don't know if anybody on this webinar has ever kept bees before. I don't know if I have any beekeepers and I've never kept bees, but I am told that in every hive, eventually they kill all the drones. Think about it. We're going to talk about your hours. Here's the general rule. Your employer wants your hours to be open-ended. They want them open-ended. They'll tell you, hey, you're going to work four and a half days a week. And then the contract comes in, the standard contract. Remember, no such thing. The standard contract will say something like this. You're going to work a minimum of 40 hours a week on a schedule set by them. Well, that's 50, 60, that's 100 hours a week. Typical. They want it open-ended. Similarly, they'll do the same thing with call. They told you that call is one in four, but the standard contract that comes into you says something like this. What we looked at before when we said it wasn't in English. Well, this might be every other, this might be every night, this could be anything. They want it really open-ended so that they have maximum flexibility. If people leave, if they have needs, they can call on their employees to come work harder. You, on the other hand, want to close it. You want closed-ended. You want to work. I don't care how you do it, whether it's an average of 50 hours, an average of 40, an average of 100, I don't care what the number is. What I don't want to have happen to you is you think you're taking a 40 or a 50 or a 60 hour a week job and it turns into 100. Even if you get paid for it, you might not want to do it. You want to try and control it. Share call equally with four other doctors. That's hard to get because people might leave, but what you can get is share call equally with all other doctors. Lots of times you get a cap and never worse than one in four. Make them go get locums. Make them figure out another way. You don't want to be all by yourself on call. Even if call is relatively easy, it can be a real pain in the neck. You want to try and close it somehow. It's the difference between forcing them to ask you, will you work harder, and then you get a choice versus you will work harder. I want to give you negotiating room to not get worked to death. I will say this is the number one problem. When people call me up and say, Steve, my job sticks. I'm very unhappy. The number one reason is I'm working a different schedule. I'm working harder. I'm working in a different place, but they change the job on me, and it's almost always ours. You really want to control this as best you can. All right. Next topic, getting fired. To be fair, this is also quitting. It's not just getting fired. There are some rules here. Well, there are three parts here, right? There's first, how long does the contract run, notice, and for a cause? How long the contract runs is a lie on the first page of your contract. You'll have a contract that says it's good for three years, or it's a one-year contract that automatically renews every year. Almost always a lie because in the back of the contract, there's notice. It allows you to be fired or quit on some short notice for any reason at all. You don't have to do anything wrong. Boss just decides you're not fitting in. You're not making enough money, whatever it is. It'll say something like you can be fired at any time for any reason on 90 days notice, or 60 days notice, or 30 days notice, something like that. Well, if you have a 90 day, if it says you can be fired at any time on 90 days notice, and the first page of your contract says it's a three-year contract, it's not a three-year contract. It's a rolling 90-day contract, right? Because whatever today is, 90 days from today could be your last day at work. That's notice. We're going to talk about these a little more in detail in a second. For cause is a list of things that get you fired immediately. No notice, no money, just get out of here. All right. Now, as to notice, the 30, 60, 90 days or more, the rule is more is better for you. It comes in, more is better. It comes in multiples of 30. Typically, you're going to see 60, 90, 120. Sometimes they'll stretch it to six months, very seldom anything else. There's no legal reason for that. It can be any number at all. The trick here is, is it enough time for you to find another job from your perspective? That's why more is better, right? And from their perspective, lots of times employers want you to leave when they fire you. They don't want you to work out the notice period. So they give you the 90 days notice and they say, leave. Well, when they do that, they have to pay you for the notice period. They should pay you every penny you would have made, including benefits to send you home. Well, that's why employers don't want to make it too long. They figure they're looking for the balance between how long do I need to replace you if you quit? And how big a check do I have to write you? If I, if I want you to leave, if I'm going to fire you, it tends to fall in the 90, 120. From your perspective, you're better off with 120 days to find another job. You're better off with 120 days worth of money if you've got to, um, if they're going to pay you off, more is better. Now, next is for cause termination. This looks like an esoteric list of stuff that you get fired for. It looks like a lawyer thing. A lot of people ignore it. Say I'll never get fired. Don't ignore it. It's all about money. Employer has a choice between giving you 90 days notice and paying you for 90 days or firing you here and paying you nothing. A lot of employers will search this list for a way to get rid of you. Even if you've done nothing wrong, they'll try and create something you've done wrong. I'm sure everybody's seen people railroaded before. You don't want it to be you. Here's the rule. Subjective stuff, bad. Objective stuff, okay. Objective, okay. Subjective, bad. Here's objective, right? This stuff happens. You deserve to lose your job. Your employer doesn't get to decide, right? It is what it is. You get notice, you get due process, you get to fight. Here, however, the classic is a failure or refusal to follow the rules, regulations, policies, procedures, and practice enforced now or promulgated in the future. What the hell are these things? You're not faithful enough. You're not diligent enough. You're unprofessional. What do these things mean? And that's a rhetorical question because you won't know what it means until you're fired, right? You don't want these things in your contract. This is bad. It's too easy to get rid of you to make an excuse and say you're not diligent enough, right? Well, it's hard to say I want to be able to act unprofessionally and not get fired. So what you ask for is a second chance. You say to them, listen, if you want to fire me under one of these things, tell me what it is I actually did wrong. Give me a chance to fix it. If I fix it, I don't get fired. You're looking for somewhere between 10 business days and 30 days to fix things. I don't expect you to really fix it. Sometimes you can go out and take a class. You can apologize. There's things you can do. But what this does is it buys you time to fight. Now, instead of being unemployed and calling me up saying, Steve, I was fired wrongfully, do something about it. You get to call me up and say, Steve, they're trying to fire me. Now I got some leverage because now I can call them up and I can say, hey, it's bullshit. It didn't really happen. You can't fire her. And look, she fixed it. We've got to fix. It's been fixed. You can't fire her. And all the while you can go look for another job because you're toast. You go look for another job. We negotiate a graceful exit and you get out of there without ever being fired, which you don't want to ever be fired for cause because you'll have to report it for uncredentialing and licensing for the rest of your life or what it'll seem like the rest of your life. Get a second chance. Our last topic, the non-compete. The literal you won't practice medicine for some amount of time in some distance, for three years within 30 miles of the practice. These are legal in most states. We're going to talk about them in a second, but first a quiz. This is a quiz. Aaron, if you could check this, people either put it in the question box or the chat box, but I want to know in every single lawsuit, in every lawsuit between an employer and an employee over a non-compete, who wins? How many people say A? How many people say B? Aaron, let me know what they think. Let's see how good they are. Come on, everybody vote. We got some people voting, some people being shy. What do we got, Aaron? It looks like we have a lot of As, the employer. A lot of As. Okay. Well, thank you. And I am thrilled to tell you guys, I am super thrilled to tell you guys, you're all wrong. You're all wrong. And I don't, you're wrong even if you vote an employee because the only winner every time is me, the lawyer. You're going to pay me $25,000, $50,000. I'm going to make a lot of money because you've been sued. We'll sort out later whether you win or lose. Now, I tell you as a practical matter, those of you who said employer, you're correct. As a practical, thanks, Aaron. As a practical matter, you guys are correct. Because first, you'll have to pay me all that money to defend you. But second, nobody will give you a job in the zone until it's resolved because they don't want to get sued. So nobody will give you a job and you can't start your own practice. I mean, you certainly can't go out and rent space and hire people if some judge is going to shut you down. So it's a practical matter, you lose. So the lesson here is negotiate your non-compete up front. Don't wait until the end. And don't believe anybody who tells you that. Don't worry, they're not enforceable because they might be right. You might win the lawsuit, but as a practical matter, you're still going to lose. So try and get yourself a non-compete that you can live with up front. Now, here's the rules for the non-compete. The more urban the place you go to, the smaller the non-compete should be because the idea of the non-compete is to keep you from stealing patients. People travel further to see the doctor, particularly a specialist, out in the country than they do in the city. So if you're in Manhattan, you might only see a few blocks. Stay in Boston, you might see a mile or two. Go out in the suburbs, you might see seven miles, 10 miles. Go out in the countryside, you might see 30 miles, 50 miles. You might see a lot. And it may be reasonable, but you got to look. And what I like to do is reverse engineer it. Get a map, a real map. You can Google a radius map, but it's not road miles, it's air miles. Whatever they tell you, map it out and say, where would I want to take my next job? If there's no other hospital nearby that can accommodate you, don't worry about it. Don't negotiate it, don't waste your time. But if there are places, if you want to stay in town and there are other places to work, try and reverse engineer the non-compete. It doesn't have to be a circle, right? The general lesson is whatever it is, cut it, cut it, cut it, cut it. If it is a circle and it's 20 miles, make it 10. If it's 10, make it five. If it's five, make it two. It doesn't have to be a circle. You can use zip codes, you can use boundaries. So like I'm in Maryland, you might take a job in the Maryland suburbs where Aaron is in Silver Spring. And you'll say, hey, I take a 10 mile circle, but it stops at the Washington DC beltway or the Washington border. Or I don't know, you're near some border, you're in Philadelphia, you stop it at the Jersey border, you stop it at a river. You say, I can work east of I-95, but not west of it within the circle. Just carve it up as much as you can, because it's all about your ability to move and not be trapped in your job. They'll tell you don't steal their patients. I don't care. It's what the internet is for. Don't waste your time negotiating this. Patients will always find you. Don't steal their employees. That will be in your contract as part of the non-compete. Again, I don't care. Go find your own employees, not the place to negotiate typically. That's your contract. Please, please, please find the worm before you sign the darn thing. And we'll open it up to questions with Aaron. And while you do that, see, there's me dressed up as if I'm really a lawyer. Thanks so much, Mr. Coffman. All right. We do have 15 minutes for questions. As a reminder, you can submit your questions on the Q&A section. I did want to start off with a question with many of us in urogynecology being women. I was just curious if you see any differences kind of in that standard contract for men versus women when you review those, and if you have any strategies for women in negotiating those contracts. So, okay. You don't typically see a difference in the contract that's originally proffered to you. Man or woman, they're going to offer you the same money. It's going to be the same deal. I mean, employers have learned that lesson at least. But a big difference I do see is that women don't negotiate as hard. Women just, this is not me being sexist. There's all kinds of books. There's all kinds of things written about this. You guys try and come together. You assume that if you do a good job, you will be treated appropriately. And it just doesn't work that way, particularly if your employer's a man. I want to read you guys something. Jennifer Lawrence. Let me see if I can find it here. I am not, I've got my phone here, but I'm not making a phone call. I got to find something to read to you guys here. Jennifer Lawrence, everybody should know her, right? Really, I think at one point she was the highest paid actor in Hollywood. And come on, let me see if I can find this here. It is well worth reading. Give me a second here, gang. Come on. Ah, here we go. Okay. So you might remember when Sony got hacked by the North Koreans. They were mad about the movie that Sony had made. They released all these emails from Sony. And when that happened, Jennifer Lawrence learned that she had made a lot less money than her male counterparts who were much less of a draw than she was. And she was interviewed by Lisa Dunham. And I want to read you what she said about it, because it really hits home for women for me, because I see this all the time. And by the way, this also happens to men looking for their first contract. It tends to be a first contract phenomenon. You know that I don't want to be greedy thing. Lawrence blames herself for not fighting harder for better pay, but admits that as a woman, she felt under pressure not to be labeled difficult or spoiled. When the Sony hack happened and I found out how much less I was being paid than the lucky people with dicks, it's her, not me. I didn't get mad at Sony. I got mad at myself. Jeremy Renner, Christian Bale, and Bradley Cooper all fought and succeeded in negotiating powerful deals for themselves. If anything, I'm sure they were commended for being fierce and tactical while I was busy worrying about coming across as a brat not getting my fair share. But she warned she's not going to let gender stereotypes hold her back in the future. I'm over trying to find the adorable way to state my opinion and still be likable. F that, she added. And that's kind of my attitude. F that. Please negotiate. Don't get suckered by the I'm worried they'll think I'm a bitch thing, which by the way, is out there. You don't get labeled bitch anymore. You get labeled difficult, and it's equally obnoxious. But don't let it stop you. Thank you. We do have a question here in the chat. Is it possible, and this is going back to the maternity leave comment, for the maternity leave in your contract that is different or longer than the institution of a whole, can you specifically carve that time out in your contract if it's different than what the institution does? Rule three holds. It's all negotiable. If you can get them to agree to anything you can get them to agree to, you can write down in the contract. The contract follows the deal. So I would say at a big institution, it can be difficult to get them to give you more than they're giving everybody else. Not impossible. Difficult. It depends how badly they need you. What's your negotiating leverage? Certainly at a smaller place, people have, there's no such thing as standard. Everybody's deal is different. What did you ask for? And if you don't ask, you won't get it. So I always encourage you to ask. It's the only way you'll figure that out. Right. And then another question that we have is, can you speak to replacing the non-complete clause with a non-solicit clause? Does that fly? How often is that successful? Or are we better off narrowing the radius of a non-compete? It's a really rare circumstance. When you go to a state where non-competes are legal, it's a pretty rare circumstance to be able to get rid of it entirely. It can be done. Typically, it's done, when I've succeeded, it's often with a side letter. So it's in your contract. And then you have a letter that says that the institution promises not to enforce the non-compete when you leave. Right. It really depends what you do. Right. The more, the more your job is impatient and people aren't going to follow you, the more powerful your argument is that you should not have a non-compete. A non-compete and anti-solicitation really aren't good substitutes for one another. Because like I said, people will always follow you. So if you go across the street, everybody's going to find you anyway. You don't need to solicit. So they don't like that. And besides which, often the non-compete isn't really, the proper purpose of the non-compete is to keep you from stealing patients. Often it's used to suppress your wage. Right. Because particularly in cities where there's either one large institution or maybe there's two doing battle and somehow they manage to have these terrible non-competes where it says you can't work in the county, you can't work within 50 miles and you can't work for our biggest competitor. Well, they're not doing that because they're worried patients will follow. They're doing that to suppress your wage. Because if you can't go across the street to the competitor, your competitor can't offer you more money. And if they both do it, they can offer less money. They can both offer less money to their doctors and give more money to their administrators. So it's often a wage suppression tool. And it also traps you, right? Because if you have to leave, if you have to leave town to get another job and you've got us, maybe you've got a spouse and kids in school, right? The more embedded you are in the community, the harder it is to move. And therefore the easier you are to abuse because, hey, what are you going to do about it? You got a non-compete. So it's hard to get rid of. So I recommend trying to gut it as much as possible. Yeah. Reduce it, reduce it, reduce it. You don't have to just do the mileage the way I described. You can also argue that it shouldn't apply to places that don't compete with them. So if you're working for a hospital, maybe you're going to go to an HMO. Well, patients won't follow you from a private clinic to an HMO, right? They won't follow you. You could go work at the VA hospital. Nobody follows you from private practice to the VA. So you can work for the government. You can work for an HMO and maybe there are other jobs in your community. You say, well, gee, I could work there. Maybe it's private practice and you're going to go in-house at the hospital and just do inpatient of some sort, you know, or indigent clinic, or I don't know what the job is, but you want to look for other opportunities that make it so you don't have to move and you can still get a job. All right. And we have a few more questions here. One person asks, who would you negotiate with your division chief, department chair, or employer lawyers? There is no single answer to that question. Every situation is different. Typically the way I do it, if you come to me, I will read your contract. We'll get on the phone. I'll tell you what it says in English. We'll match it up against what you were promised. We'll figure out what's different. We'll figure out what's bad. We'll figure out what maybe we would want to ask for that you didn't think about. Then we'll make a list. If the world were perfect, what would we change? More money, more vacation, whatever, smaller non-compete, whatever it is, signing bonus, moving expenses, whatever it is. We'll make a list and then we'll prioritize the list, what's most important to you, and then we'll figure out the best way to negotiate it. And it really depends on how good a negotiator you are relative to the people that you're going to negotiate against. Sometimes people negotiate it themselves. You guys negotiate it yourselves. If that happens, I give you a negotiating lesson. I teach negotiation too, specific to what you're trying to accomplish. Part of that is the strategy of who do you talk to? Were you dealing with a recruiter? Were you dealing with the chairman? Were you dealing with the director? We'll talk through who you were dealing with, who the decision makers are, who we think you'll have most success negotiating with, and then we'll decide how to do it. Should it be done on the telephone, in person, by email? What's the best way to do it? Sometimes you'll look at it and you'll say, Steve, I don't want to do this. I'm going to get eaten alive by this guy. And then you'll send an email off to your employer that says, hey, I've read your contract. Everything looks really interesting, but I got some questions. Very legal, though. Who should my lawyer call? And they'll email you back the name of their lawyer, and I'll call their lawyer and ask the questions and negotiate it for you. So there is an answer to that question, and it's a solid it depends. We have a few questions about how much does it typically cost to have a lawyer like yourself, and what is a reasonable time for contract review? And also, how do we find a lawyer to help with our contract? Okay, I'll take those in reverse order. First, just call me. All 50 states, I've done all 50 states. I've done American Samoa, Puerto Rico, Guam, every place. Just wherever you go, I can take care of you. The rest of that question is most lawyers, me included, it'll charge you by the hour for this. I'm $400 an hour, which tells you nothing about what it costs, because you don't know how long it takes. But what I described to you before, I will read a dozen pages, you know, 12-page contract, I'll read that in about 12 minutes. There's a strong bin there, done that to it. Give me 30 pages, it'll take me a half an hour. Give me 10, it'll take me 10 minutes. And then we get on the telephone. A typical 12 to 15-page contract takes about an hour and a half, give or take, to do everything I talked about, to explain it, to make the list, to set the negotiation strategy. So that's about two hours, you figure 15 minutes to read it, an hour and a half on the phone, you negotiate it yourself, there's some follow-up, figure about 800 bucks, give or take. If I negotiate the whole thing for you, hard to know. I don't know how big our list is. I don't know whether they say yes, do they say no, but it typically adds an hour or two. So if you budget somewhere between $800 and $1,500, that's about right. I don't believe that anybody who says they will read your contract and send you back comments is doing you a disservice, because unless you talk through what it is you were promised and what your expectations are and what you're trying to accomplish and prioritize things, you can't really discuss the contract. I mean, I can't tell you what's bad in your contract until I talk to you and understand what it is you're trying to accomplish, and everybody's trying to accomplish something different. Some people are trying to maximize money and some people are on visas and they're trying to stay in the country, and it's a totally separate set of issues. I think we have time for one last question. This question asks, having a private practice operating out of a local hospital offering a guaranteed salary, however, the salary was framed as being a loan and that they would be bound to work there for a set period of time to pay this back. After working that set time, they'd be on a production based model. What are some of the risks in this type of contract? Okay, so what you're talking about is a recruiting agreement from the hospital with an income guarantee. So the concept here is that they're going to pay you $300,000 a year, but your revenue is going to be stinky. So that first, so let me do it. Let's say you're going to make, let's make it $240,000 because that's $20,000 a month, right? That first month you bring in no revenue. The insurance companies pay nothing. And there's all these setup costs for you. You know, it caused, they had to buy your malpractice insurance. They had to hire an MA, an assistant for you. There's all these extra costs. So the practice spends $50,000 on you. That first month pays you and everything. And they get no revenue. The hospital pays them the money. The hospital makes up the difference. So if there's a shortfall to make your pay, the hospital loans the money. The risks are, if it's not done right, the risks are you pay taxes on your pay twice, or you pay back your own wage. Plus you, you, you make $300,000 and then you owe the hospital $300,000 when it's done, or you have to, or you get taxed on the money when it's paid to you. And then the loan is forgiven later. That's what the extra time is for. If you stay, the loan is forgiven as loans are forgiven. They are taxable. So if those taxes come to you on the forgiveness, so that the hospital gives $20,000 to the practice, the practice gives it to you as wages. You pay taxes on it. Then that loan is forgiven. If the taxes come to you, you'll pay taxes on that same money again. So the risks are double taxation and paying back your own salary plus some. This is that recruitment agreement will be twice as long as the employment contract. And it is also negotiable and it should be signed by all three, the practice, you and the hospital that don't ever, ever, ever try and do that one on your own. That will not end well. All right. Well, on behalf of Augs, I'd like to thank you, Mr. Kaufman and everyone else for joining us today. Our next fellows webinar will be held on Tuesday, July 27th at 8 PM Eastern time. And you can visit the Augs website to sign up. So once again, thank you very much. Thank you, Erin. Thank you, Faith. And thank you everybody else who was on. It was a pleasure.

physician employment contracts

salary

benefits

ownership

hours

termination

non-compete clauses

negotiating contracts

career impact

financial future