Associates: the employment questions
- Compensation model. Base salary, percentage of production or collections, or hybrid with a draw. Note the difference: a percentage of collections makes the associate share your payer-collection reality; a percentage of production doesn’t. Use specialty compensation surveys, not guesswork.
- The credentialing lead time. An associate can’t bill payers until credentialed: 90 to 180 days. Sign offers accordingly and plan the gap consciously.
- Restrictive covenants. Clinician non-competes are state-dependent and shifting. Several states now restrict physician non-competes outright. Draft with current local counsel.
- Malpractice. Occurrence vs. claims-made, and who pays tail coverage on departure. Decide it in the offer letter, not the exit interview.
- Classification. A full-schedule associate is an employee under any honest test. Misclassification is actively enforced.
Partners: the equity questions
- Agree the valuation method in writing before emotions attach to a number.
- Practice lenders finance buy-ins. Earn-ins need documented milestones or they get litigated.
- Keep production pay separate from ownership returns. Equal profit splits with unequal production is the classic partnership resentment.
- The buy-sell agreement is the whole game. Write it while everyone likes each other.
- Licensing constraint: in most states only same-licensed professionals can own the PC (CPOM). A non-clinician “partner” can’t hold PC equity. That road leads to the MSO structure.