Associateships – Some Make It, Some Don’t


Recently, my good friend, Dr. Peter Wylie, successfully encouraged me to ride on a European motorcycle tour. On the first day of the trip, I was absolutely thrilled. The weather was perfect and the countryside reflected ancient history. However, after a few miles, it became obvious that I was less skilled than the other riders. With hand signals, I encouraged several riders to pass me. Within a short period of time, I was riding near the rear of our serpentine. I was frightened … I had concerns that if I could not keep up with the pace, I might ruin the trip for the group. Of course, if I rode beyond my ability, I might ruin the trip for myself in more ways than one! Once again, another rider behind me passed as we were coming out of a “right-hander.” However, this time, the rider lost control of his bike and tumbled into the Italian countryside. Fortunately, he was not seriously hurt, and we were able to make temporary repairs so that he could finish the day’s ride. Later that night, I shared my feelings with our tour guide, Christian. I explained that I felt that if I had been able to keep up the pace, perhaps the accident would not have happened. He responded with one of those facial expressions that is, at once, both fatherly and mischievous. With his Austrian accent, he said, “Rrrich, you shute not vorry about this. In our lives, there vill be times vhen a person vill try to pass us. It is their choice, not ours. Sometimes they make it … and sometimes they don’t.” I slept well.

I suppose the same thing is true with associate agreements. Regardless of our efforts to provide for professional fairness, “Sometimes they make it and sometimes they don’t.” Other professional relationships exist that also could be considered associations. For purposes of this article, the term, “associate,” refers to a nonownership position.

Much has been written about dental-employment relationships. Many valid reasons for failure have been given, such as inadequate compensation, insufficient patient flow, and lack of adequate written agreements. In my opinion, the most important prerequisite for success lies in the contractual provisions for termination.

Employment contracts should provide for the term length. They also usually provide for “cause” and “no-cause” premature termination of the agreement. These provisions allow either doctor to terminate the contract with a 30-to-90-day written notice. Reasons for termination for cause usually are straightforward. Examples include death or loss of license. However, reasons for no-cause termination can be more arbitrary, such as “I just don’t want to do this anymore,” or “Martha, my assistant, says you’re hard to work with.” Premature termination can be particularly harmful if the contractual “noncompete” clauses are not carefully created to protect both parties.

Termination also can identify the end of one phase of the professional relationship and the beginning of the next. If an option to purchase is intended, it should be included and defined in the employment contract. Issues such as practice value and continued employment for the senior doctor should be thoroughly delineated contractually.

As with any form of employment, we cannot absolutely predict the future. However, with adequate discussion and planning, the senior doctor and his or her associate have a greater chance of being in the “make it” category.

After practicing dentistry for 30 years, Dr. Rich Seims now specializes in dental practice mergers and acquisitions. Seims & Associates, Inc. provides management-consulting and brokerage services for dental practices in the Pacific Northwest and Alaska. He is recognized as a seasoned facilitator and discreet confidante. Seims & Associates can be reached at (888) 720-7220, or by e-mail at rich@seims.com. Visit his Web site at www.seims.com.

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