“As a physician, you have a great deal of negotiating power.” -Employment Attorney Jim Barna
In today’s episode, Jen talks with employment attorney Jim Barna about physician contracts. Jim has a wealth of knowledge and experience in working with physician contracts that we are thrilled to get to tap into here at DocWorking. Tune in to hear about non-competition agreements and what you can do about them, the things you can ask for that may not be offered to you up front and much much more! Whether you anticipate negotiating your first contract out of residency or fellowship soon, are considering switching jobs, or are happy where you currently are, you will be glad you listened to this episode!
Jim Barna is an employment attorney who has represented physicians and medical practices for over 25 years. His Bachelor of Arts degree is from Stony Brook University. His law degree is from Washington University in St. Louis.
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Podcast produced by: Amanda Taran
Please enjoy the full transcript below
Jim: As a physician, you have a great deal of negotiating power.
Jen: Thank you for joining us today on DocWorking: The Whole Physician Podcast. I’m Dr. Jen Barna. I’m here today with the best employment attorney I have known. He has been helping me since the late 1990s, and countless other physicians and medical providers, to draft and negotiate physician contracts and medical provider contracts. I am thrilled to have Jim Barna here, my husband, employment attorney and expert. Jim, thank you so much for coming on with us to give us some tips about ways to negotiate physician contracts that take into account some work-life balance factors that we should be looking for. Thinking back, you’ve helped me just by giving me ideas of what would be expected in different specialties types of contracts that actually helped me to make decisions in medical school, and then all the way through contract negotiations, helping me to look out for different factors that were important in a contract. Can you give us some tips today on what to look for when we’re negotiating our contracts?
Jim: Sure. I’m very happy to be here, I’m very excited about DocWorking. As you know, this is a subject matter that I can go on about for hours. What I’m going to be doing here is just a real rough sketch of the importance of physician contracts and how to negotiate them, and what to look out for so you don’t get caught in some of the pitfalls.
One of the things I want your viewers to think about as physicians and other medical professionals, is that in your career, in your training, physicians particularly have learned to be really stoic about how they go about their work. When you’re in medical school, residency, and fellowship, you’re always taught to just tough it out, and to deal with situations by doing more work, and giving more of yourself. And that’s great from a training standpoint, but once you get into practice, there are some real conflicts with that. Certainly, those sorts of conflicts are some of the things that are discussed at DocWorking.
Here’s just some tips about how to deal with that. The first thing is when you start thinking about a job you want, whether it’s right out of fellowship, or residency, or if you’re changing jobs during your career, the first thing you’ve got to do is really find out everything about that job that you possibly can. What I mean is it goes a lot further beyond what most doctors think about. You want to get to the point where you’re not only talking about the employees at that practice, that you’re thinking about joining, talking to the partners, but also talking to other physicians in the community to sort of get an idea of the reputation of that practice and trying to find out if there are any problems or issues that could come up that could really affect your work-life balance. Things like call schedule, and whether the practice is structured in a way to favor older doctors versus younger doctors, knowing how strong the contractual relationships that the practice has are, and what’s happening within the medical community there. Those are all really important things that can easily affect your job with that practice or hospital. But, in addition to that, it can really have an impact on your work-life balance. So, number one, find out everything you can about the practice, good and bad, before you even begin to negotiate the contract.
Secondly, all physician contracts should be in writing, whether it’s what we call an at-will contract, which is a normal employment situation, or a contract that goes a period of time and may lead to partnership, no matter what, that has to be in writing. Next step, every physician, no matter how much you hate the legal profession, and legal verbiage, you’ve got to get comfortable with reading through the entire employment contract, and knowing exactly what is meant and the implications of what it’s meant to your career. Every physician is highly intelligent, and if they sit down for an hour, they can tease their way through an employment contract. And if there’s anything that you don’t understand, what the heck that is, or the implications of it, we’ll just circle it in red and make sure it’s something that you are able to find out about to your satisfaction.
With regard to an employment contract, every specialty has different forms that employment contracts take. An oral surgeon’s employment contract is going to be radically different from a pediatrician’s contract. Each specialty is going to have, by convention, benefits and things in it that can benefit you as an employee, if you know about it. For example, there may be things that you aren’t told to ask for, but are easily acceptable within your employment contract. For example, just throwing something out, if you’re seeking a job in Southern California, or in Hawaii, where housing prices are out of control, if it’s a partnership-based practice, they may have some subsidy for you in terms of housing. They might not ever tell you that, but in situations where housing prices are very high, that’s often something that they have to put in there to seal the deal if it’s asked for.
So, you want to think about the things that you want to see in that contract in terms of features. But you also want to think about what could go wrong. For example, what if you’re in a practice and it loses its main hospital contract two years into your practice? That may result in you staying with that practice, that may result in you leaving that practice, but you want to make sure that if that bad thing happens, you have as much flexibility as possible.
One thing that I always impress upon physicians is that, as a physician, you have a great deal of negotiating power. You’re going to be a major revenue generator for your practice, or for your hospital. And since you are one of those revenue generators, you have negotiating power to try to get things set up the way you like them when you negotiate your employment contract.
And just to talk about noncompetition agreements. These can also be called restrictive covenants. A noncompetition agreement is basically a clause where your employer is trying to dictate what your behavior is going to be after you leave your employment. For example, it may have a limitation on what hospitals you can practice at, what geographic area, it can exclude you for a set period of time, and it could exclude you for a given subject matter. For example, if you’re a primary care doctor who has another specialty that they do and you’re working under that specialty, they could restrict you from working in that specialty in the hospitals or in the community that you’re used to practicing at.
Now, my advice generally, is if you can avoid a noncompetition agreement, do so at all costs. The way you do that is when you get one, you’re going to need to ask some questions to the person who you’re dealing with regarding the contract. Have you had any problems in the past regarding doctors competing against you? Why is it this hospital, this hospital, this hospital? Why is it so long? What are you concerned about? Usually with those sorts of quick questions, you can begin to chip away at that noncompetition agreement. And if you do it nicely enough and long enough, you may get to the point where they just go, “We’re just going to throw out this noncompetition agreement altogether.” That’s the best-case scenario, is to just not have a noncompetition agreement.
Jen: Jim, one of the questions I have for you is, is there ever a time at which you have to pick and choose your battles when you’re negotiating a contract?
Jim: Yes, that’s an important consideration that the physician has to keep in mind when they’re working with a private attorney. You want to make sure that you have an attorney who’s got enough experience to know that when you’re negotiating a physician contract, you’re trying to get the best deal possible both for you and for the institution or the employer. If it seems like your attorney might be coming on real strong, that should be a bit of a red flag. You want an attorney who’s going to look at the whole situation, know what your priorities are in terms of the contract, but also be able to get a successful contract negotiated where everyone involved is satisfied and happy going forward, that this is going to be a good employment situation or a good practice situation.
Jen: Is it ever the case that a physician would be best off to speak to their attorney upfront and say, “My goal is to negotiate this contract and ultimately accept this job”?
Jim: Yeah, I think anytime you’re going into a job negotiation situation, you want to have a conversation with your attorney, where you set out what your priorities are and what your goals are. But you want to make sure that this attorney knows that if it’s a job you really want to take, that they’re not going to do anything that will be negative in terms of the goodwill that the parties are bringing toward the negotiation.
Jen: If I’m a physician applying for a job or negotiating a contract, should I be negotiating that myself and then I interact with my attorney? Or, should my attorney be negotiating it for me?
Jim: Yes. That’s a really important consideration. It really depends on a lot of factors. The number one factor is, as the physician, do you feel comfortable that you can get your priorities across to the person you’re negotiating with at the new practice? Do you feel like you have a broad enough grasp of the situation? Anyone who’s going to be competent in negotiating their own contract has to be able to figure out every last implication that the wording of the contract has. If you feel confident with that, then it’s perfectly reasonable for the attorney to sit in the second seat, and not even be an active part in the negotiation. You want to be able to consult with that attorney to know what the pitfalls are, and where you have opportunities in the negotiation? But if that’s the case, then having that attorney reviewing things, and being a little bit behind the scenes can be perfectly reasonable.
Now, if you’re the sort of doctor where you don’t feel comfortable in those situations, or if, for example, American culture or American legalese is something that you’re going to have difficulty with, in those situations, that’s where you really want to have the attorney take a more active role in acting on your behalf, but they’re always acting on your behalf. So, the overwhelming thing is for you to have your attorney know what’s important for you and what your goals are with the negotiation.
Jen: One last quick question. You mentioned before that negotiating a noncompete agreement is a top priority to negotiate that part of your contract, so that you’re not tied into a noncompete agreement if you can. However, are there cases where that might not be your top priority, and maybe you need to pick your battles and maybe focus on something else in the contract, and maybe for some people, there are circumstances where they’re okay with a noncompete?
Jim: Yeah, that’s true. It really just depends on how entrenched the hospital or the employer is with regard to the issues related to the noncompete. As we’ve discussed previously, there are certain ways to ask questions about the noncompete to see how important it is for the institution to have that. Often, noncompetes are put into place by the attorneys and the institutions don’t have a whole lot of skin in the game in terms of what those provisions are.
Jen: I see what you’re saying. So, you’re saying it may not even be that important to the institution, and if that’s the case, it would be easy to strike it, and if you can strike it, you should?
Jim: Yeah, absolutely. I wouldn’t even use the term striking it. I would just talk about broadening it, loosening it, relaxing it. In business, you have some companies who have been really burned by employees who’ve left and then gone into competition with them. And that’s often what they’re looking out for in a noncompete agreement.
Now, the most important thing, of course, is for you, if you’re going to be working under a contract, whether there’s a noncompete agreement, you need to be comfortable with what the implications of that noncompete agreement are. If it’s just a noncompete, that prevents you from practicing or having privileges at a specific hospital and there are five other hospitals within the area, well, then that may be something that’s very easy to live with. However, if it’s something that duty or specialty and your geographic location is effectively going to make you unable to practice your specialty without moving to another state or another metropolitan area, well, you want to consider that as a potential risk. I’m not saying that you shouldn’t sign it if it’s a good enough job but you just have to know, if things go bad, what are the changes I would have to make to my practice, because of this noncompete agreement?
Jen: Right. Thank you so much for clarifying all of that. Thank you for coming and talking with me about this. I really appreciate everything that you do. And you’ve helped so many physicians, and you’ve helped me so many times along the way. And your advice is truly appreciated.
Jim: Well, it certainly is my pleasure. Physicians are some of my favorite people in the world. I think the legal implications of the medical field and physician employment and practice are just fascinating. And that’s why I’ve concentrated in that area throughout my career.
Jen: Thanks again. If you’re hearing a little bit of background noise during the last part of this conversation, it’s because we took it out to Central Park, [laughs] New York City. We are grateful for the ability to be out here recording in the middle of the day, and we appreciate you listening. Thank you for joining us on DocWorking: The Whole Physician Podcast.
Jill: We want to remind you that if you do want coaching support, right now all you have to do is go to docworking.com. And you can check out our coaching opportunities for you to get a certified coach who is experienced in working with physicians. Also, if you’re not on our newsletter yet, you’ve got to get over to docworking.com today and sign up. That’s how you find out about all kinds of offers and resources that we have available to you. Until next time, thanks so much for being with us here on DocWorking: The Whole Physician Podcast.
Amanda: Hello, and thank you for listening. This is Amanda Taran. I’m the producer of the DocWorking Podcast. If you enjoyed our podcast, please like and subscribe. We would also love it if you check out our website which is docworking.com. And you can also find us on YouTube, Facebook, Twitter, and on Instagram. On Instagram, we are @docworking1, and that is with the number 1. When you check us out on social, please let us know what you would like to hear on the podcast. Your feedback really means a lot to us. And if you’re a physician with a story you’d like to tell, please reach out to me at [email protected] to apply to be on the podcast. Thank you again and we look forward to talking with you on the next episode of DocWorking: The Whole Physician Podcast.