After interviewing for your first attending physician position and finding a job that interests you and meets your criteria, the next step is to negotiate your employment agreement before officially accepting an offer. It’s common for early career physicians to get taken advantage of during the contract negotiation process simply because they don’t know what they don’t know. To help graduating residents and fellows who are landing their first attending position, we’ve compiled a guide to reviewing and negotiating your first physician employment contract, including how doctors can determine if their offer is good, what every doctor should negotiate in a contract, common red flags to avoid, compensation data, and more.
Note: This article is part of our resources for graduating residents and fellows and transition to practice series. We’ve compiled a list of other relevant resources below. If you are not a part of our transition to practice series and would like to sign up, you can find the sign-up link at the top of our transition to practice guide.
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Where to begin with negotiations for your first physician employment contract
One of the questions we see most often in our physician online communities is where (and when) to even begin when approaching contract negotiations. While our medical training does a great job of teaching us how to be good clinicians, it doesn’t teach doctors negotiation skills, so many of us struggle in figuring out our approach to advocating for ourselves when we first receive a job offer or letter of intent. Below, we lay out some basic strategies for negotiating the best deal possible and provide additional resources to dive deeper into specific topics.
Honestly, the negotiations process starts the minute that you take the first call, even if you don’t know it. The employer will be listening to your responses for what is important to you and what you’re looking to get out of a job, and taking notes about things like how badly you need a job in that area, how attached you are to that job in particular, any hints you may drop on expected compensation or schedule, what benefits are important to you, etc. You will want to keep this in mind whenever you are asked anything that even tangentially relates to the negotiations process.
Once negotiations become more out in the open, you’ll want to make sure you’ve locked down terms that are favorable to you before you sign anything. After you’ve nailed your physician interview and you have a tentative offer from a prospective employer, they may ask you to sign a letter of intent (LOI). Before you do so, you’ll want to make sure the major terms have been negotiated. As we cover below, once you’ve tentatively agreed to something, it’s a lot harder to come back to the table to renegotiate later.
Negotiating basics and key negotiation strategies and tips for physicians during their first job search
Before you begin negotiations, you want to have a plan in place for how to approach the process.
We like to remind residents and fellows as they enter the negotiations mindset that people who expect more get more. This is just one of the reasons why you should never accept an employer’s first offer. Not only that, you should make them make the first offer. If they ask you to toss out the first proposal, redirect the question back to them and tell them you’d love to see what they’re thinking, as it’s difficult for you to propose an offer without seeing all aspects of the physician compensation package, as salary isn’t everything. While knowing your worth can help you determine where you want to end up during negotiations, you don’t want to inadvertently lowball yourself because they were willing to offer you more than the offer you propose. If they know they can get you for less, they’ll take it.
During your negotiations, kill them with kindness. While you should be firm with your realistic requests during the process, be kind while you do so. It’s much harder for people to dismiss your concerns if you’re polite and considerate in your approach. You’ll also want to learn some good tactics for physician negotiation. We have book recommendations for negotiations on our recommended book list for physicians.
Related PSG resources
Know that you are in demand, know your worth, and ask for it
The doctor shortage is no secret in America, and the physicians aren’t the only ones who know it. Employers do too. After all, they are coming to you because they have a need for your services. You are increasingly in demand.
While you will likely be competing against other candidates, you have unique experience. Evaluate yourself ahead of time, and compare your experience and knowledge to the job description for the position you’re applying for. During the negotiation process, it’s great to show how your specific expertise aligns with their needs. Highlight anything that could potentially set you apart from your competition - and remember, that expertise is worth a value to your future employer.
How do I know if my job offer is a good one?
A key word to commit to memory here: research. Doing research ahead of time is one of our key negotiation rules. Spend the time before meeting them at the negotiations table. Key areas to focus on include:
Know your competition for the position
Have compensation data for similar, relevant positions
Leverage your network for additional information about the position
Get as much information from others as you can. Your network you can leverage includes your mentors, residents and/or fellows from the year(s) before you, and others in your field and in our online physician communities.
Along with research, it’s important to remember that there’s no “perfect” job for everyone. The offer that’s good for you is the one that works best for you, taking all factors (such as location, flexibility, compensation and benefits, etc.) into consideration.
Related PSG resources
What can I negotiate in a physician employment agreement?
While a prospective employer might not move on their stance on certain aspects of an employment agreement, you won’t know until you try. And if you don’t ask, then they certainly won’t willingly counteroffer themselves. This is another area where having a seasoned physician contract review attorney can be an invaluable asset. They will likely have experience with employers who say that they work under a standard agreement that “cannot” be changed, and will also know where the wiggle room might be to help focus your efforts during negotiations.
While everything is negotiable, this doesn’t mean you should spend your time negotiating everything. Prioritize your negotiations on what matters most to you. If you aren’t sure where to start, we’ve compiled the top ten things we most often see people negotiate as part of their contract and compensation package.
Related PSG resources
Where can I find relevant physician salary and compensation data?
You’ll want to be familiar with the data relevant to your specialty and location in large compensation databases often used by your employer. Your physician contract lawyer may have access to some of the large databases such as MGMA, Sullivan-Cotter, and others. Other places to check include your hospital library or with others in your program. If you can’t access it through these means, paying for access to the data may be necessary to best negotiate your contract.
Additionally, we have compiled many (free) resources for physicians looking to know if they are being paid their worth, including aggregate salary data by specialty and a compensation database where you can look at individual data points to ensure you’re comparing apples to apples with things like specialty, subspecialty, location, practice environment, and hours worked. We feel very strongly about the fact that having salary transparency helps all physicians and are so grateful that members of our physician communities have helped us to compile these free large databases for our members to empower them in negotiations.
Remember that salary is only one piece of your total compensation package, and benefits, time off, signing bonuses, bonus structures, on-call compensation, and other perks are also a big piece of the puzzle. Additionally, if your compensation is based on productivity, you’ll want to understand whether targets are realistic when projecting how much you will make. If you’re entering a partnership track or will be offered the opportunity to invest in practice real estate or in an ambulatory surgery center, you also want to understand what your potential compensation is in the long run.
Related PSG resources
How do I approach and handle having multiple job offers on the table?
Having options can be a great benefit when negotiating a contract with a future employer. When you have multiple offers you’re considering, you have the ability to walk away. This is the most powerful tool you have when negotiating a contract.
However, it can also be uncomfortable if you’ve received multiple offers and/or are waiting on an offer from a job that you really like and are getting pressure from a job to respond to the offer. Most employers will be reasonable about requests to wait for a short period of time while you finish interviewing at other places, but keep in mind that they likely won’t wait months, as they also need to know whether to interview other candidates or extend other offers. There’s a bit of a dance that comes with being honest that you want to know your options while still expressing that you are very interested in their position. Your hand may be forced into a decision eventually, so always keep the timeline in mind and let the job that you’re waiting for an offer on know that you have other offers on the table that you have to respond to, and you’d appreciate if they were able to let you know sooner rather than later about an offer for their position.
When assessing which job is ultimately the right one to take, consider not just which one is the best fit right now, but which one gives you the best career longevity. Never say yes right away, even if it’s your dream job. Take the time to evaluate your options, and bring your family or loved ones into the discussions, as this decision will affect all of you and your happiness.
What is a letter of intent (LOI) and where does it fall in the negotiation process?
When a prospective employer offers you a letter of intent, they are stating they intend to hire you. Likewise, when you sign a LOI, you are saying you intend to work for them. Once you sign the letter of intent, it’s presumed that you will stop entertaining other offers, and that you’ve tentatively agreed to the terms listed within it, so don’t sign one until you’ve evaluated all your offers on the table as discussed above.
While a letter of intent is usually a non-binding contract, you should treat it as the promise that it is to negotiate in good faith with the mutually intended goal of arriving at a signed contract. Ideally your LOI will include the wording “non-binding” and/or specify the ability for either party to walk away if you can’t come to a satisfactory agreement during the remainder of your contract negotiations.
As we alluded to above, be careful about signing a LOI if you haven’t already negotiated your salary. While a LOI isn’t binding, the future employer usually enters into the remainder of the contract negotiations under the assumption that you are comfortable with the salary stated in the letter.
While negotiations can still take place after signing a letter of intent, it’s a good idea to get a physician contract review attorney involved once you have a LOI in hand, as it becomes harder to negotiate something covered within a LOI.
Related PSG resources
Red flags to look out for in physician employment contracts
There are several common things we’ve seen over the years as red flags in physician contracts. If these aren’t addressed during contract negotiations, they can lead to issues down the road and often contribute to physician burnout. Red flags include not only what is often thought of and discussed, such as overarching noncompetes, but things that are commonly excluded from contracts as well.
Whatever terms you agree to, remember to make sure to get them in writing. Assume if it isn’t included in the contract, it isn’t guaranteed, even if you discussed it during the negotiations process. If the wording seems vague or unclear and you aren’t sure if the contract protects you in the way you discussed, a contract review attorney can help you navigate and understand what’s included in the contract as written, as well as recommend what changes you should potentially ask for.
Related PSG resources
How do I negotiate a better contract myself?
Have compensation data
While it’s important to set high expectations, you want to ensure that your expectations are realistic. Our salary databases and resources can help you with that. Additionally members within our physician Facebook groups can help you assess this, as can a contract attorney.
Know your competition
While it’s likely impossible – and far too time intensive–to play private eye on every other physician applying for the job, knowing your competition can help your negotiation position. If the position has been open for a while and they are having difficulty filling it, you’ll have more bargaining power than if it is a highly sought after position. If you learn that a key expertise in your field of study is under consideration for the same position, then you’ll need to balance your own expertise against theirs.
If you don’t ask, you won’t get
You’re in the most powerful negotiating position before you accept a position. This is the time to ask for what you want. In most cases, the worst that will happen is that they’ll say no. Also, make sure any agreed upon terms are in writing.
With the research you’ve done above, you know your value in the marketplace. Your willingness to advocate for yourself and that value is one of the largest leveraging powers you have, as research shows that over half of job seekers don’t negotiate at all. As mentioned above, you get more when you expect more, especially when you have similar - or better - credentials.
Have other options, and know that the best power is the power to walk away
Having other offers will give you more leverage, and more power to walk away. If you are currently employed and seeking other opportunities, you have the additional leverage of time and flexibility.
The best position to be in is one where you don’t have to take their offer, while they have to fill their empty position. The more of a time crunch they have, the higher the leverage you’re likely to have.
Have emotional intelligence during the negotiation process
While we want you to know your worth and advocate for it, keep in mind that negotiations are a dialogue between you and an employer. It’s important to be respectful and try hard not to come off as entitled.
Sometimes, the employer isn’t in a position to be able to provide you with all your objectives. While you should be firm in your objectives and know your dealbreakers, the process is a balancing act. You don’t want to be the person who is always asking, as too high or too many demands may make the employer less likely to meet you at the table. We see so many graduates not acknowledging some of the challenges employers face or the realities of reimbursement challenges in the healthcare landscape. Not listening to and considering the employer’s counterpoints about why they cannot give you something will not only make it more likely that you won’t get the job, but may be a red flag to them that you will always be difficult to work with, thus making them not want to give you the job even if they can give you something.
Should I hire a contract attorney to review my contract?
In one word, we feel the answer to this question is a resounding ‘yes.’ There are very few exceptions to this, like the VA where you may not have a contract. Ultimately, you’ve come too far and invested too much to be at the point where you can (finally!) earn a paycheck for what you do, and where you get to choose the environment in which you do it. Skimping on the money to have another set of experienced eyes look over the contract and tell you if the compensation is fair, identify red flags in physician contracts you may not know to look for, help you negotiate your salary a little higher, or in general be your advocate in a process where the other side has someone advocating for them, is not prudent. A contract review will cost you anywhere from about $500 to a few thousand dollars, but even identifying one thing that could increase your compensation or save you time, money, and stress in the long run will likely pay off that investment in dividends.
Learn more about why you should use a contract attorney to review your physician contract.
How do I know which contract attorney to hire to review my contract, and are there any recommended contract lawyers for physicians?
The right contract attorney for you is going to reflect the experience the contract attorney has as well as the availability, price point, and recommendations from colleagues. We’ve compiled a list of both national and local contract attorneys based on recommendations from physicians in our physician communities, as well as a resource for how to pick the right contract attorney.
Related PSG resources
Conclusion
With the labor shortage of physicians in healthcare, we want to remind doctors again to know your worth and to advocate for it during the negotiations process. This is your best opportunity to not only ask for a competitive salary and compensation package, but to help put together a comprehensive agreement that will get you the work/life balance you desire to help prevent physician burnout and help you make the life in medicine you desire for the years ahead.
Don’t underestimate your years of education and training. You may very well have the upper hand in the negotiations, and while you shouldn’t exploit that, remember that you have something they want. You will be bringing value to their practice or institution. Don’t minimize that as you approach negotiations and put together your strategy.
Additional resources for residents and fellows
If you’re a resident or fellow, make sure you watch the recordings of the transition to practice series events in our communities, which cover the topics above and answer a lot of other FAQs we see during this time period.
Checklist of things to do as a graduating resident or fellow
Securing your life and disability insurance
Contract negotiations and job search
Personal finance
Student loan refinancing
Side gigs for residents and fellows
Figuring out what to do with retirement accounts
Housing for physicians
Moving discounts for physicians under our resources, discounts and perks for physicians