Things to Pay Attention to Before You Sign a Contract

Episode #427 with Dr. Suzanne Ebert

You don't want to buy a practice that's held together with duct tape. That's why you need professional guidance! And today, Kirk Behrendt brings in Dr. Suzanne Ebert from ADA Practice Transitions to help you prepare before you sign on the dotted line. With her expert advice, you will learn how to do your due diligence so you can have a smooth transition. If you want a stress-free transition experience, listen to Episode 427 of The Best Practices Show!

Main Takeaways:

Your ultimate goal is to not be blindsided.

Communication leads to a smooth transition.

Have all the difficult conversations upfront.

Take time to “look under the floorboards”.

Get clarity around what mentorship means.

Be clear on the seller’s exit timeline.

Quotes:

“I don't know if you in your position have ever heard of some transitions where the younger doc comes into the practice, and they look around, and they don't know what's going on here. The systems are not what they thought they were going to be. The staff has not been told that they're the new owner, potentially. The compressor is being held together with duct tape and chicken wire. This happens. It’s a horrible scenario for these doctors coming in. So, what we do is we make sure that that doesn't happen. We have a whole transition plan that goes from start to finish.” (11:21—12:09)

“How are we going to handle the staff? How are we going to inform the staff that this is going on? How are we going to handle if you need to get licensed, if you need to get credentialed with any certain companies? We’re going to make sure that that younger doctor has a checkoff list that basically goes through, ‘Take a look at the equipment. Make sure it’s all functional. What supplies are you using? What do the clinical operations of this practice look like on a day-to-day basis? What's the typical schedule? What do treatment plans look like? Have we talked about that?’ So often, these conversations don't happen. And when they don't happen, the younger doc comes into the practice, and they get blindsided. We don't want that to happen. So, we say starting a couple of months out, you're going to start having these conversations.” (12:36—13:32)

“My very strong opinion is that your staff needs to be involved in the transition. And I contend that if you have been in one practice for 35 to 40 years — I'm going to tell you a secret — your staff probably knows that you're thinking about getting out! And if they don't, start dropping some hints that it’s time. Think about it. I would like everybody who says, ‘I'm not going to tell my staff until the day of the new doctor walking in,’ I want you to put yourself in that staff member’s shoes who has been there, potentially, with you for years and years, feels like they're a very valued part of the office. Think about what they experience when you tell them, ‘So long! I'm no longer your employer. Dr. so-and-so is coming in.’ It’s shocking.” (14:08—15:09)

“Life happens. Things do happen. So, if it is an associate situation, we have a full associate contracting toolkit. And that guides our doctors through, how do you plan for an eventual breakup? If there's a problem, how are we going to handle this? What are we going to do if there's work in progress? What are we going to do if there's a clinical issue that we can't seem to resolve? That's all written out at the beginning. So, again, have the hard conversations before the contracts get signed. There's a lot more to a successful transition than a successful transaction.” (21:41—22:25)

“We are not advocates of dual representation. I can just leave it at that. Every doctor needs to have their own team representing their own interests. I will say that when you follow our system, or