If you are a new veterinarian, negotiating a job offer and contract might be your first real business transaction. You might look at your first job as a potentially short-term arrangement. However, not understanding your veterinary contract could have long term consequences.
Negotiations for a new job are tricky. You want the job. You want to be well thought of and well liked. However, you also need to be treated fairly and understand what you are signing.
Women as a group are less likely to negotiate than men. In a study of MBAs finishing from Carnegie Mellon, 57% of male students negotiated their salary compared to only 7% of the women. A 2015 study by Glassdoor over a range of industries showed that 16% less women than men negotiated a presented job offer. Women often don’t negotiate because they fear being perceived as demanding or aggressive. They are also often socialized to put others first and focus on the needs of others. However, these statistics also mean that a sizable number of men don’t negotiate.
My first piece of advice is do your homework. It is much more comfortable to negotiate if you have evidence to back up what you are worth. Salary information can be obtained from AVMA published salary statistics, job search websites with listed salaries, and websites such as Payscale. This is harder if you are a specialist as there is less published data. Using your network can be very important. When looking at a salary offer, also look at the cost of living compared to the national average.
Getting pointers on negotiation itself can also help. Several interesting articles are linked below.
My second piece of advice is consider having any veterinary contract or offer letter reviewed by an attorney. The attorney should ideally not just be a family friend. Especially if the contract has a non-compete clause, you need someone who understands employment law in the state in which you will be working. I know it seems expensive. However, as a former employer, I can tell you that the doctors I hired who worked with attorneys almost always got better terms. When I became an employee of a larger group, my attorney coached me to negotiate improvements in the offered contract.
I’ve had people comment that if you get an attorney involved, you immediately set the stage for a contentious negotiation. I’m not recommending that you have the attorney negotiate for you. I’m also not recommending that you argue every detail. However, our industry has changed in the last 20 years. I have talked to young veterinarians who signed disadvantageous contracts, in both independent and corporate practices, because they did not really understand what they were signing. An attorney may also help by suggesting potential negotiation strategies.
Five important issues to discuss during a job evaluation and negotiation
These are questions that you should ask during your interview and/or contract negotiation to make sure you really understand the offer.
1) If a position with a straight salary is proposed, ask about the criteria and time frame for raises. If the criteria are production based, you will want to be able to see a report of your production on at least a quarterly basis.
2) The majority of veterinary contracts I have seen contain a base salary with a production bonus. There are a HUGE number of variations on this theme. Things you want to ask about production contracts:
- Are there any items on which I receive lower production or no production? Do these items change? Do you notify me of any changes to production percentages? Many hospitals pay doctors a lower production percentage on pharmacy items or a lower percentage based on the mark up. Some hospitals have items on which doctors receive no production. Depending on the number and type of these items, what looks in the contract like 22-25% might be 18-20% on real invoices. It is reasonable to ask for example production off actual outpatient and inpatient invoices.
- How often is the production bonus paid? How often do I receive a production statement? These are important both for budgeting but also to know if you are in negative accrual, if this is part of the contract.
- Do you have negative accrual? Negative accrual means that if your production is lower than your base salary, you develop a negative “account balance.” If you end up taking a lot of time off and aren’t generating revenue, you could end up “negative” and then take a long time to return to positive. To understand how negative accrual works with your employer, you need to at least ask:
- What happens if I take a long vacation in a busy month?
- Do I have an excluded start up period to build caseload?
- Does the balance ever reset?
- What happens with maternity or paternity leave?
- What do you expect for production? Although you may be content just making or just covering your base, you need to know if the hospital culture only values very high production. You also should ask approximately what other doctors are producing to know if the goal is feasible. You especially want to know if other doctors can produce above their base in a practice style that fits a sustainable work life for you.
3) It is important to ask about holidays, after hours, and call in. You may assume that your practice is closed for most holidays, but practices vary for Christmas Eve, New Year’s Eve, and the day after Thanksgiving. It is nice to understand the expectations ahead of time. In addition, it may seem that there is no after hours in a primary care clinic in a big city. However, the grey areas are the 4 pm Friday foreign body case or cases hospitalized overnight. On the specialty side, there is a huge range in the type of compensation for after-hours work that can dramatically affect your income so ASK for details.
4) The next category of question is around non-compete clauses. I know veterinarians who have had to leave their chosen state for 2-3 years to sit out non-compete clauses. I also know veterinarians whose non-compete clauses were either illegal or not enforceable. The rules around non-compete clauses vary dramatically from state to state which is why you need an attorney. Ask about a buyout provision for your non-compete. Some organizations will require a signed non-compete for hire but will allow you to pay a certain amount of money that decreases the distance and/or time of the non-compete if you leave.
5) What happens to my veterinary contract and contract terms if the hospital is sold? Hospital sales now happen regularly so you need to understand if your production terms are protected (including which items receive full, partial, or no commission) in a sale. You also want to know what might change with your non-complete, if your benefits can be changed, and if your contract length is the same.
Other Resources
There are many other items present in employment contracts and offer letters. The VIN Foundation has a great model employment contract with discussion points on these other items. The five I list above are big items that can dramatically change both what you take home and what happens if you want to leave.
These articles provide some other thoughts on veterinary contracts:
http://veterinarynews.dvm360.com/dont-hate-negotiate-employment-contract
http://veterinarybusiness.dvm360.com/nailing-down-noncompete
http://veterinarynews.dvm360.com/why-pals-can-be-problem-departing-doctors
These resources have some good tips and information on negotiations:
https://leanin.org/education/negotiation-pays-negotiate/
https://www.nytimes.com/2018/03/16/business/lean-in-five-years-later.html
When you spend the time to do your homework and ask these questions, you’ll not only understand the offer better but also the job and your employer. Take the time and lean in.