How Physicians Should Negotiate Their First Contract

Negotiating your first contract is one of the most critical steps in launching your career as a new physician.  While the excitement of securing a position is high, it’s essential to take the time to evaluate the contract carefully to ensure fair and transparent compensation, job satisfaction and long-term career growth.  Gone are the days of handshake agreements – make sure that there is a written signed contract that protects both sides.  You may feel ill equipped to tackle a contract evaluation with the lack of business training provided in med school and residency, but here are a few tips on how you can approach the negotiation process with confidence.

1. Understand the key components of the contract

   Before even entering the negotiation process, make sure that you can confidently identify and discuss the standard elements of a contract:

   1. Compensation: Is it salary, or fee-for-service?  What is the overhead percentage, and what does that include (e.g. administrative support, billing, IT, marketing, etc.)?  Will you get a fair share of tests to be interpreted?

   2. Benefits: Is there free or subsidized medical and dental plans?  Is there a signing or moving bonus, and if so, do you need to return it if you don’t stay a certain amount of time?

   3. Workload and schedule: Are there minimums or maximums on patient volume, number of days in clinic, or hours?  Are you expected to cover other MDs patients when they are away?  Are there expectations to work evenings or weekends?

   4. Non-compete clause: Are there restrictions on working elsewhere after leaving the job, or ‘poaching’ staff or patients?

   5. Termination and renewal: What are the notice periods, contract lengths and renewal options?

   6. Requirements: What licensing exams are needed?  Do you need up to date ACLS?  What insurance do you need to have in place?

      
      

      Understanding the terms allows you to assess whether the offer aligns with both your professional and personal work/life balance needs.

      
      

2. Research market standards

   Make sure you know what your bargaining position is by figuring out how your job offer compares to others in the area.  This is especially relevant for overhead percentage, which can vary widely in the community from 15% all the way up to 40% or higher.  The best way to do this is to talk to colleagues and mentors who work in the same region.

   
   

3. Prioritize what matters to you

   Not all aspects of a contract are negotiable, so identify your top priorities.  Ask yourself:

   1. Is schedule flexibility more important than maximizing income?

   2. Is the opportunity to ‘buy in’ and own a part of the business important for me?

   3. Am I comfortable with the non-compete terms and call schedule?

      
      

4. Seek professional help

   Physician contracts are complex legal documents, so reviewing the document with a legitimate employment lawyer familiar with the medical profession and provincial labour laws is probably a good investment.  They can help explain ambiguous language and identify hidden pitfalls, which may save you a world of trouble down the road.

   
   

5. Negotiate with confidence and professionalism

   Negotiation doesn’t have to be confrontational and result in a ‘win/lose’ scenario.  Here are some tips:

   1. Be respectful but assertive.  Express appreciation for the offer while advocating for your needs.

   2. Provide data from other practices or hospitals to support your requests.

   3. Consider trade-offs; if salary isn’t flexible, you may be able to get a signing bonus or relocation assistance.

   4. Get everything in writing.  Verbal promises don’t count if not documented in the contract.

      
      

6. Take your time

   Never feel pressured to sign immediately.  Employers expect candidates to review and discuss contract terms.  Take at least a few days to a couple of weeks to consult with legal advisors, mentors, and colleagues before signing on the dotted line.

Negotiating your first contract as an MD is a crucial step toward a successful and satisfying career.  By understanding the key components, researching market standards, seeking expert advice and advocating for yourself professionally, you can secure a contract that supports both your financial and personal well-being.

Author: Dr. Krishna Sharma, Director of Physician Engagement, Specialty Medical Partners

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