Episode 17 – Deeper Dive: Demystifying Dental Contracts

“If you don’t understand a contract when you sign it, chances are it won’t be a useful document when you need it.”

Crazy things will happen to you in your journey as a dental practice owner. Your team will sue you, patients will be upset, and associate relationships will break down. It’s just a part of business ownership that you can’t get away from. The good news is, you can protect yourself and your practice…and it doesn’t have to be confusing. As a business owner myself, I know contracts aren’t that easy to read, but the more documents you look over, the more they will make sense to you. 

I was so grateful to my good friend David Cohen for joining me on the past two podcast episodes to help shine a light on the often murky world of legal contracts. One thing that especially stood out to me was when David encouraged business owners to know when you’re going to need legal advice. 

Please don’t go to the internet and download templates or piece something together. I do know people who have done this. While it may seem like an easy way to handle a contract, it won’t make sense to you when you read it, and worse it probably won’t protect you when you need it to.

So today, I’m sharing some of the techniques I’ve learned as a dental business owner for understanding and building contracts that will protect your Investment Grade PracticeTM including:

• When to seek legal advice
• What 3 things you should know about every contract
• Negotiation: what it’s really about

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EPISODE TRANSCRIPT

Victoria Peterson 0:00
And I love what David said about negotiation. Negotiation is not about winning or losing. It’s not a sports game. Negotiations is about getting more of what you want, without making the other side lose status quo. So another way of saying that is how do I sit on the same side of the table? As the person that I’m negotiating with? How do I look through the world through their eyes?

Narrator 0:31
Welcome to Investment Grade Practices Podcast where we believe private practice dentists deserve to get the lifestyle today, while building an asset for tomorrow. Join your host Victoria Peterson to design the practice of your dreams and secure your financial independence. Let’s get started.

Victoria Peterson 0:53
If you don’t understand the language of a contract, as you sign it, chances are it will not be a useful document should you ever need it. Hello, everyone. It’s Victoria again. That was one of my biggest takeaways from David Cohen’s, back to back interviews, I certainly hope you enjoy the double podcast there, he had so much great insight to share with us. So even though legal terms are difficult, the more contracts you read, the more comfortable you’ll get with the pattern of it. And it has to make sense to you. One of the things that I do when I’m looking at legal contracts is I will actually write down what is the outcome of this deal? What are areas that I’m willing to negotiate on? And what are my non negotiables, absolute deal breakers. And I always have that list with me when I’m looking through the contract. And I want to be able to take a highlighter, and highlight the areas where deal breakers might be embedded. And if they’re there, then we keep negotiating. I want to highlight those areas that I might be flexible on to see what the other side came back with, to negotiate on. And I think David really, for me pointed out several real key pieces here.

Number one is that, you know, really know when you’re going to need legal advice, I have had so many doctors over the years, say you’ve hired associate doctors can I just use your contracts as a boilerplate or even worse, they go to the internet, and they start downloading bits and pieces of, of internet templates for associate contracts. And they put it together. And it makes no sense. And it’s not going to make sense to you when you read it. It won’t make sense to you when you need it. Because a contract has to do three things for you. Number one, you got to know how you’re getting in the deal. Number two, how you’re going to operate within the deal. And then number three, how to end the relationship. And as soon as the IGP book comes out, we’re working on it night and day to get it to come out. David and I are going to go really deep into each one of those. But getting into any deal, whether it’s purchasing real estate, hiring an associate, going into business partnership with someone, it starts with a dream or a desire.

And when you have that dream, start to educate yourself on the value, what is it that I’m purchasing? How do I compare that you know, to other things, you also want to think about the relationship between you and the other party. And then think about those negotiation terms. So that’s step one, this is all about step one, getting really clear within yourself, about what the deal means to you, and where you can compromise and how to look and make it simple. And I love what David said about negotiation. Negotiation is not about winning or losing. It’s not a sports game. Negotiations is about getting more of what you want, without making the other side lose status quo. So another way of saying that is how do I sit on the same side of the table as the person that I’m negotiating with? How do I look through the world through their eyes?

I think it’s one of the number one mistakes that I see when doctors are selling their practices. They’re looking through the sellers. i And I’ll have to tell you, I do this in selling my home. My husband Pete he’s not nostalgic at all. He says houses are a stepping stone you live in it, you sell it you get another one. I have more of this nurturing hearts like oh my god, and this was my child’s room and this is where we had family, Thanksgiving and holidays and I get really attached to the memories within that building. And I know as business owners, we get really attached To the joy that our practice has given us. All of that aside not to take anything away from that there is a place where you have to get more objective and say, and

20 years down the road, what does this look like to the new buyer? How do they fit into this dream, and being able to look in their eyes, understanding the buyer persona, and what they’re looking for, helps you to understand how to negotiate so that you get what you want, and they get what they want. That’s really the way these deals work best, really the way they work best. And I think for me, when it comes to any legal situation, it’s where our leadership skills show up the most. So for me, when I’ve been challenged in my leadership, it really gets challenged on legal issues. Because leadership boils down to how I show up within myself, am I a command of my own emotions. If I don’t have clarity of purpose, that guides my decisions, then I can really get caught up in the emotions of things when it comes to legal pieces.

The crazy things are going to happen to you in this journey, you’re going to have wrong wrongful suits brought against you patients are going to say crazy things about you, your team is going to sue you, the community’s going to be upset with you, it happens. You won’t get out of business ownership without those things happening. And it really comes down to how have I been doing the work on myself as a leader to be in touch with my emotions to take a breath and have I’ve developed the observation skills needed to discover the deeper currents that is in this challenge. So I hope that you really enjoy the conversation with David Cohen. He is my go to attorney and all of dentistry when it comes to buying or selling or contract law. He has been amazing resource to our clients over the years have they as they’ve built investment great practices. Until next time, have a great day.

Narrator 7:28
Thank you for tuning in to this episode of Investment Grade Practices Podcast. If you find value in this episode, help us spread the word by passing it along to a dental friend. Subscribe and give us a Like on iTunes or Spotify. Learn more about building your Investment Grade Practice at ProductiveDentist.com Today