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4 Things Every Physician Should Know Before Signing an Employment Contract

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After all those years of sleepless nights and long hours of duties at the hospital, you’ve finally succeeded in your residency training. Give yourself a pat on the back because this marks another milestone in your professional career! Now, you are more than ready to move on to the next stage – from residency into full-fledged Physician practice.

There’s just one problem, most physicians are not as comfortable dealing with business matters such as signing a contract and doing negotiations. While it’s true that discussing your first physician contract can be an overwhelming task. More often, there’s a temptation to just to take the first offer and get to work immediately. However, it’s essential to negotiate first all terms of the job offer before you sign a contract. This to avoid making mistakes that may significantly impact your work.

Here are 4 things that every physician should remember before signing on the dotted line:

1. Ask About the Things You Don’t Understand
Employment negotiation papers may seem like they’re written in a completely different language, but it's essential that you go over them in detail. Don’t glide over the things you’re not familiar with on the contract, instead, you may ask for clarification from your potential employer or seek advice from an expert. Skipping on things you thought were not important might haunt you later on. Avoid making this mistake by making sure you understand very well the details written on your contract.


2. Be Mindful When Signing Papers
It’s a golden rule to check on everything before signing any paper. These papers may come as a one- to two-page letter of intent or a dozen pages or more of a contract. Moreover, it’s essential that you know the difference between a letter of intent and a contract.

A letter of intent will lay out all the key points related to the job offer, such as compensation. It may also contain a “standstill” agreement to prevent you from getting into negotiation with other employers. Meanwhile, a contract is the full detail of everything that concerns the job offer. Once you sign the contract, it will finalize a deal.

It’s crucial that you’re cautious not only from signing a contract but also from authorizing a letter of intent as well. Usually, letters of intent are not binding, but some are, and the impact of signing one may vary by state. It can lock some provisions and pay. If in case it’s not a binding letter of intent you’re signing, it might still affect your negotiations in other parameters so always be mindful.


3. Know Your Benefits
Compensation might be on your top list, but aside from worrying about it, you may also ask more about the things that would benefit you. Have at least a dozen list of things to negotiate about with your employer. You may discuss matters that concern vacation time, sick leave, liability insurance, and restrictive covenants.


4. Get a Lawyer’s Help
It’s recommended that you seek expert advice from a lawyer, one who knows well the “ins and outs” of employment and physician contract language. Although you might spend a few dollars for it, it’s worth your investment. Missing a few crucial details on any letter of intent and contract might be the biggest mistake of your career.

A lawyer who specializes in medical hiring can be of great help to you. Aside from reviewing your contract details, they may also give you additional insights based on experience from representing their previous clients or a prospective employer’s working culture and negotiating style. They may also have access to salary surveys that may be impractical for you to obtain.

To find the best lawyer to guide you on your first physician contract, inquire from your medical society for an experienced lawyer who specializes in healthcare and understands the rules and regulations of employment and hiring in your state.


Reviewing every detail and engaging in in-depth conversations before signing an employment contract will help you understand how it will impact your practice. Once everything is laid out, and you fully understand the terms you’re getting yourself into, you can make an educated decision about whether this opportunity will be of benefit to you and to your career.

The American Medical Association provides many resources for physicians who wish to understand employment contracts. One of those is a podcast interview series “Making the Rounds” which features senior attorney Wes Cleveland. In the podcast, they covered relevant issues regarding insurance, restrictive covenants and compensation. You may also want to check on such resources to help you succeed in your contract negotiations.

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