As an owner dentist, you’ve worked tirelessly to build your practice and establish a reputation in your community. However, as your patient list grows and your schedule fills up, you may need help to keep up with demand.

Bringing on an associate can be a game-changer, and it can also be a win-win for both sides.

For the owner, an associate can increase revenue and help expand services. But it also allows you to share the workload and take a step back to focus on entrepreneurial or managerial tasks. A well-designed arrangement can even allow a dentist that’s become part of the business to own the practice in the future.

As a younger dentist, an associateship is one of the best ways to gain experience, build skills, and eventually assume ownership. A healthy working relationship also provides mentorship and time to establish relationships with patients and the team. Dentistry demands trust and empathy, and incorporating a new provider with the existing doctor often helps maintain a healthy evolution.

Many dentists start their careers as associates in established practices, and it’s still a viable route to ownership today. But Only 10% of dentists under age 30 own a practice as of 2021, and ownership levels across all ages have fallen since 2005. A well-designed associateship can help deliver a transition that fits both parties.

Associateships are like any other relationship; they can fail because of unclear expectations, poor communication, and a lack of understanding between parties. Before signing on the dotted line, the owner and the associate must understand the ins and outs of associateship agreements. A DDSmatch Transition Professional can help lead both parties through the process and avoid the pitfalls that undermine many associateships.

Understanding the Legalese of Dental Associate Agreements.

In simple terms, an associateship agreement is a legal document that outlines the relationship between an owner dentist and the associate dentist who works for the practice.

Both sides must understand the key terms commonly used in associate agreements. Ask your advisors for clarity if you’re unsure about any part of these legal components. Some of the key terms that need definition in the agreement include the compensation structure, length of the contract, and non-compete terms. If something’s not written down, there’s a high risk of misunderstanding and conflict.

There are various types of associate agreements, each with unique advantages and disadvantages. Here are some of the most common types of arrangements that you may come across:

  • Straight salary: Under this type of agreement, the associate is paid a fixed salary, regardless of the number of patients they see or the revenue they generate. This structure may be based on a guaranteed daily, monthly, or annual rate.
  • Production-based model: In this type of agreement, the associate dentist receives a percentage of the production generated from the services they provide. The production is usually calculated based on the fees charged for the services. The rate paid to the associate can vary based on factors such as experience, skill level, and productivity.  Depending on the practice, the range could be anywhere from 25-40%.
  • Hybrid: A hybrid agreement combines a straight salary and a percentage of collections. This type of agreement provides a more stable income while also being incentivized to generate more revenue for the practice.

The production-based model is the most common structure used by practices. The associate feels incentivized to be productive, and the practice is responsible for providing an adequate workload. When you work with advisors experienced in associate arrangements, they can help both parties formulate the best solution.

Factors Considered by Associates

Before signing an agreement, an associate should conduct due diligence and weigh their decision from several angles. An owner who’s also aware of these considerations can prepare to discuss the opportunity and meet the associate’s needs. Since the best arrangements are always win-win, here are some of the factors associates have on their minds:

  • The reputation of the practice: An associate should research the reputation of the practice they’re considering. They may look for reviews online and ask other dentists in their network if they’ve heard of the practice. Associates may try speaking with current or former associates to understand the culture and reputation better.
  • Goals and values: The practice’s goals and values should align with all providers. An associate should feel comfortable with the practice’s treatment philosophy, patient care, and business practices. Owners should present a clear vision and systems for the new doctor’s consideration.
  • Compensation: Compensation is a crucial element of any associateship agreement. An associate wants to ensure the compensation structure aligns with their financial goals. Plus, many associates carry significant student debt obligations. Both parties should clearly define how the practice calculates production and collections and what expenses are deducted.
  • Benefits: An agreement may include benefits, and any costs or details should be clearly outlined. Associates eligible for benefits also need to know what happens to them if they leave the practice.
  • Non-Compete Clause: The terms of the non-compete clause can significantly affect the associate’s career. Both parties should be clear about these terms and the consequences of violating the non-compete clause.
  • Termination Clause: Every agreement needs a defined exit plan; the agreement must outline a termination clause and the circumstances under which the employee can be terminated. If there’s a buy-in or buy-out opportunity with the relationship, language may be valuable to include.

Your local DDSmatch Transition Professional has worked through these complicated details with other clients, and can make sure each piece is covered.

Look For Win-Win Dental Associateship Agreements

Associateship agreements can set the tone for a healthy relationship for both dentists. Early communication and clarity help pave the way for future opportunities, including a smooth transition, in some cases. It’s crucial to define the key terms of the agreement such as compensation structure, duration of employment, benefits, the non-compete clause, and the termination clause.

At DDSmatch, we help our clients form win-win relationships between owners and associates. Our extensive national network identifies potential candidates and brings them together. It all starts with a conversation; Is an associateship right for you? What are the short and long-term benefits of a match?

Whether you’re an owner, a recent graduate, or an experienced dentist looking for clinical opportunities, start the conversation today. From dental associateship to practice ownership, we can help. We look forward to connecting with you soon!