StudentDC Interactive

You know I’ve seen a lot of contracts.  But this wins a prize - for unfairness:

1. It’s a 12 month contract.  If the associate (employee) leave, he/she must pay $2500 a month for every month that’s left on the 12 months.  Bad?  Keep reading….

2.  If the employer fires the employee, the employee STILL must pay the $2500 a month for the rest of the contract.  YIKES!  But that’s not all….

3.  The employer can change the amount paid to the employee at any time.  REALLY bad?  Not enough….

4.  The employer also has a non-solicit and a non-compete, so you can’t work anywhere else in the state after you leave.

So, think about this:

Your employer tells you that you’re getting a pay cut.  But you can’t quit because you’ll have to pay off your “breach of contract (see 1 above).  And you can’t work anywhere else because you’ll get sued breaching the non-compete.  See what I mean? 

So…why would you sign such a contract?  

If you are preparing your resume (some chiropractors call it a “CV”), here is a great video on the blog “Interview Chatter” by Darlene McDaniel.  This video gives you tips on creating a resume and cover letter and how to use them to get a position as an associate.

My suggestions:

1.  Don’t EVER send out a resume without a cover letter.  If you are emailing the resume, the body of your email can be the “cover letter” with the resume as an attachment.  But don’t waste the email; make it a sales document.

2.  Remember “You are the product.”  You must sell yourself; there are lots of young DC’s out there who are your competition, so don’t be afraid to market yourself.  There is certainly a fine line between arrogance and confidence, but too many people err on the side of caution and don’t promote. 

3.  Keep at it.  Send out resumes to doctors in your area and then follow up with phone calls.  Ask, “Did you receive my resume? Do you have any interest in hiring an associate?   If not, do you know another doctor who might be interested?”

Good luck with this process.  Let me know how your search goes. 

I was talking with a grad today who was considering an associate contract. He said, “If the doctor won’t bend on this issue (it happened to be on a non-compete), that’s a deal breaker for me.”
I’m always pleased when I hear grads talk about “deal breakers” because it shows that they have thought through the process (whether it’s an associate contract or a practice purchase or something else) and that they know what is acceptable and what isn’t…for them.

Too many young DC’s are afraid to set limits and they are too timid to say, “This is unacceptable to me.” You get what you put up with, so if you don’t set limits on your agreements, you will get walked on, taken advantage of, treated badly.

Decide what your “deal breakers” are and stick to them. Let me know what you think a “deal breaker” is for you.

If you are in the process of looking for an associate position or considering an associate or independent contractor contract, you probably have lots of questions.  Here are some recent blogs and links that might be helpful:

Finding an associate position (from StudentDC.com)

The best way to be paid as an associate

Length of an associate contract

Average associate pay

Leaving an associate position

Signing a non-compete (from StudentDC.com)

If you have questions, feel free to email me (jean@dcpracticesuccess.com) .  Or you can post a question in reply to this blog post and everyone can see my reply.

Let’s say you’re looking at an associate (employment) contract, and it states that your commission percentage is based on collections “attributable” to you. What does that mean?
To me, it means that every patient you see, the ones you chart and adjust and shake hands with at the end of the visit, belong to you. If not, what are you getting paid for?

Here’s an example: You bring in three new patients one day. The fees for those patients are $150 each, so you get $450 for the new patients. The other doctor had to leave early to pick up a sick child, and you were asked to see one of his new patients. If you don’t get the fee for seeing his new patient, you just lost your percentage of $150, and in addition, you lost the time because you couldn’t see one of your own patients during that time.

Now, what about the other doctor seeing your patients? Who gets credit for them? If you get credit, then you and the other doctor are granting “professional courtesy” to each other. If he gets credit for seeing your patient, then the same should work for you.

I hope this makes sense. Either you get credit for every patient you see or you and the other doctor agree that you are granting each other a certain number of instances of professional courtesy. It has to be the same for both of you.

If the contract doesn’t make sense, don’t sign it until the doctor clarifies IN WRITING. Remember, what the doctor says has no legal weight. Only what is in writing matters.

Disclaimer: I’m not an attorney or a CPA. I’m providing general information, not legal or financial advice. Consult with your attorney or CPA on all contracts.

You have just received a contract to look at for an associate (read: employee) position.  You see that it is a two-year contract and that you cannot leave until the end of the contract.  If you leave, it says, you must pay substantial “penalties” for breaking the contract.  If you don’t want to renew, you must do so more than 60 days before the end of the contract. 

Ok, this sounds pretty ominous, but is it?  Take a deep breath and think about this:  The term of a contract is established for two reasons:

1.  So both parties have an opportunity to renegotiate terms (like pay/work)

2.  So both parties can decide if they want to continue with the relationship.

But there may be a thousand reasons that you might have for wanting or needing to leave the contract within the term.  A family emergency, your spouse’s illness, the realization that you don’t want to live in that town - all kinds of things could cause you to decide to leave.  So why should you be penalized?  You shouldn’t!  So why does the doctor want to penalize you for leaving?  He/she just wants to be sure that patients continue to be cared for, and he/she is not left treating all the patients.  If you give enough notice, or find a suitable substitute, you should be able to leave.

I hope you will not sign a contract that has an “early leave” penalty.  The doctor may tell you he won’t enforce it, but, like I always say, “If it’s not in writing it doesn’t exist.”

A soon-to-be grad brought me an interesting dilemma the other day.  Here is the choice he was given:

Pay Package #1.  Base plus 35 percent incentive on the monthly collections of the entire office.

Pay Package #2.  Base plus 50 percent incentive on his collections each month.

In other words, is it better to get a greater incentive based on your own work or a lower incentive, but based on the work of the entire office?

After quite a bit of thought, I figured out that it is a classic investment dilemma:  Are you willing to take more of risk for a higher reward or less risk for les of an award?  Another way to state it is:  Would you rather take the sure thing (getting paid based on the office as a whole), or take a chance (what if you can’t produce enough to get the incentive each month?)?

The risk, of course, is in what you think you can do to bring in patients on your own.  If you can bring in a lot of patients every month, you can do really well.  But if one month you are sick, or have a family issue that takes you away from the office or prevents you from marketing, you will only receive your base. 

There may be other considerations I am missing.  I would like to know what  you think - which would you take?  I will tell you what this doctor decided and why, in a later post.

Chiropractors aren’t the only business owners who haven’t figured out the difference between independent contractors and employees. FedEx was classifying their drivers as independent contractors, but they wanted control over them (which means ‘employee’). The company is now the subject of a class action suit by drivers. Read this blog from my friend Kelly at TaxGirl.com to get a better understanding about this issue.

There is not a week that goes by that I don’t get at least one contract that shows a basic misunderstanding of the “independent contrator” status. If you have a contract you want me to look at, I would be happy to do that. Note that I’m not an attorney, and I’m not giving legal advice; I’m just giving you my opinion and pointing out issues that need clarified.

As usual, it depends.  It depends on the area where you’re working, and on the doctor who is hiring you and the number of other associates in that practice, and the experience the doctor has had with previous associates. 

Many associates receive a base pay with bonuses for higher levels of collections.  Some doctors pay only incentive/bonus, which is pretty tough for someone starting out.

According to the Chiropractic Economics latest pay and expenses survey, the average associate makes about $60,000.  But “average” is a tricky word.  My father used to tell me, “If your head is in the oven and your feet are in the freezer, on average, you’re comfortable.”  Some associates are making a lot more than $60,000 and I know for certain that many are making a lot less.

If I were considering going into an associate position, here are the two questions I would ask:

1.  Is the base enough for me to live on, including my student loan payments?  Consider that in any one month you might not bring in enough patients to get the additional incentive. 

2.  Can I make more working on my own?  Never forget that you are bringing in patients for someone else.  The phrase “you can’t take it with you” applies here.  This is a very complicated question, but keep asking it and thinking about it. 

Set yourself a time limit, and then move on, if you’re not making enough or you think you’re ready.)

What do YOU think is a reasonable amount for an associate to be paid?  Let me know your comments. 

I talked with a DC yesterday who was let go from his associate position. Like any other job, it can come to an end that quickly. He is working on options, one of which would be to go into business for himself but very cheaply, by providing services to people from their homes. Here are some considerations we discussed:

1. He’ll have to get his own provider status with Medicare (855I as a sole proprietor).

2. He will have to take cash or checks, since it’s difficult to carry around a POS (point of sale) machine to run credit and debit cards.  I suggested he get an invoice form from a local office supply store (duplicate), so he could keep track of patient receipts and bills.

3. He will have to check with the city to see if he needs a business license. We talked about his ability to work from his home, but he is in a development with protective covenants and they probably won’t let him. He also would have to get a zoning variance to work from home. I’ll talk more about this later, if you’re interested.

4. He needs to keep track of his mileage, since he’s using his car primarily to see patients. He should keep a notebook in his car and note mileage at the beginning and the end of each day. If he wants to be really exact, he could subtract personal miles, but I wouldn’t worry too much about this.

5.  He’s going to get a portable table to take with him.

6.  He needs to keep track of all expenses for his startup, so he can use these to file his taxes.

What else does he need?  What would you do if you were in this situation?  (By the way, he doesn’t have a non-compete to deal with, so he can go anywhere.)