Date: Dec 29, 1997 From: DR JBJ@aol.com Subj: Associates I am asked to speak at LACC once or twice a year on associateships. I am not a practice management guru, although I do a one day intensive small group workshop for new docs to help them get off to the right start. I would never discourage associating for the new doc. The problem is not with associating in general, but with the doctors that the associate chooses to work for. The new doc has a tendency to look for either a "high profile" megaclinic or high starting salary. They are looking for flash instead of long term stability. I encourage the new doc to look for someone who is practicing the way they visualize themselves practicing and has been successful doing so. I also describe to them the various financial arrangements that can be utilized so that everyone wins. In many of the areas of the country, consolidation is an increasingly utilized option, and if the young associate is smart, he or she can work himself into a very strong position in someone else¼s clinic without the obvious stresses of ownership. There are 4 types of associateships that I tell the new docs about and explain the pros and cons of each. There are 4 cornerstones of success for the new doc: 1) Find a mentor/coach and hopefully work with them. 2) Understand money and become a master over your finances. 3) Master the art of confrontation 4) Practice with presence, certainty, and Love. Dynamics 1. New docs believe that old docs are there to work them, bleed them dry and leave them destitute by the side of the road 2. Old docs believe the associates are there to use their office, pump them for knowledge and then about the time they start earning their keep, they leave and take their patients with them. Basic rules 1. Most associates last 11/2 - 2 years .. Associating is not forever 2. Associating is more about learning than making the big bucks. 3. A higher % is preferable to a salary. You will earn your salary 4. Have an attorney read over every contract. Never give up your receivable. Contracts benefit the advantaged party. 5. Know yourself and your needs before you choose an associateship. 6. Dependence is a killer. 7. No compete clauses do not apply to associates. The 4 basic Associateships 1. The Associate Mill - Nice large office, multiple associates, organized, successful - Usually low % with small salary (if salaried they will give you the duties of a CA - They pay for everything - Their goal is to train you, get you busy and make as much as they can before 18-24 months. - They may try to get your receivable after you leave. Pros 1. Great place to learn patient management. They have a vested interest in training you. 2. Very little responsibility. You are free to build a practice without usual hassle. Cons 1. You will never make real money. % is too low 2. Competition with other docs in office. Strategy 1. If you lack solid pt. management skills, and are willing to work hard, you can learn what would ordinarily cost you 1000¼s in seminars. When you know what to do .. move on. 2. The struggling practice Ä Small single doctor practice Ä low volume of patients (look at sign-in sheet on Monday or Friday) Ä High % because Dr. is desperate to get someone in to build patient volume. Pros 1. Will probably be open to buyout possibility. 2. If you know patient management, you can make good money. (get contract) Cons 1. You do not want to learn from this Dr. 2. Dr. will have a tendency to get petty/jealous if you get successful. Paying for breakage¼s, or other increase in overhead, etc. Strategy Ä If you know business and have good patient management skills, cut a killer deal with a high % and a buyout clause. Just make sure this is where you want to practice. 3. High Salary position Ä More like employee than associate Ä Does not need you to bring in patients Ä Salaries around 30-50K. Even company car Ä Jobs usually involve physiotherapy, writing reports. Very little adjusting, just token. Ä Many times not even a Chiropractic office. Pros 1. Quick money 2. No real responsibilities Cons 1. It is a dead end with no future, no raises, and 1000 new docs waiting in line. ( Very hard to leave and make same money right away.) 2. You will probably do about $75,000/month in services for the company. (Hard work, long Hrs.) Strategy Ä Live on very low personal overhead, save a high % of your salary and open your own practice (or associate) within 2 years. 4. Traditional Ä Usually just an ordinary successful practice Ä Dr. is typical chiropractor, looking for a little help (Vacations) and a little extra $ Ä Usually no salary, but possible draw with moderate % (45 - 55)% (draw is like a loan against future earnings) Ä If older doc, possibly looking for future easy buyout. Pros 1. Can learn a greater variety of business and management skills. (Dr. more open.) 2. Opportunities for longer term relationships. (buyouts, satellites) Cons 1. Unless Dr. is a natural teacher, it is watch & learn. (most Drs. don¼t like to baby-sit.) 2. Dr. doesn¼t need you there, so if he doesn¼t like you or the situation, you¼re gone. Strategy Good straightforward opportunities. Search for an office and a Dr. you like, try to negotiate a draw (instead of a salary) a good % and possible buyout. Date: Dec 29, 1997 From: SHAKADOC@aol.com Subj: Associating I am an associate and love it because I didn't take it as a slave but see myself in control of my choices. My contract is based on performance. I¼d send a copy but my scanner is down. I get paid per patient on an exponential type growth depending on the numbers I see. It wasn't much fun starting out because I made peanuts but if I didn't accept personal responsibility for my situation I would be stuck, miserable and hating my boss and the world. I took it as a challenge and am having fun building a practice and watching my income grow. $7 per patient for the 1st 400 per month and $8 for the next 100 and $9 for the next 100 and $10 for the next 100 and $11 for the next 100 and $12 for the rest. It is a contract for hustlers and it fits right in with my sprit in life. Dad taught me that I have to work for something if I want it, no free rides. My contract reflects this. Subj: Associates Date: Dec 28, 1997 From: tlangley@mindspring.com What a great subject and what incredible timing. My wife and I have a practice and have talked to scores of graduates and grads-to-be over the years. In fact we have hired two. Neither would I say was successful. One thing folks need to realize is that chiropractic is different than medicine. You don't just get your license, open your door and expect someone to pay you $100,000 a year. In fact, there's not even a guarantee that you'll be hired at all. I believe that virtually every graduate, unless they are compelled to teach or research, should open their own practice. Now having said that, let me add that not many have the experience or senseto run a practice or a business. Many associate or do the independent contractor routine in order to figure those things out. Unfortunately, these new graduates expect the host DC to cover their student loans and treat them (pay, vacation, perks) like a real doctor. In reality, most graduates should almost volunteer their time to a successful practitioner in order for the grad DC to be exposed to practice and the business aspects thereof. In an associate relationship, the graduate can and should expect to make at least a one to two year commitment, have non-compete or at least restrictive covenants, and very low beginning pay. Any other scenario will put the associate in a weakened position later and expose him/her to potentially inappropriate habits during their employ. Date: Dec 28, 1997 From: DCDoll@aol.com Subj: Independent Contracts I have just re-negotiated my independent contract. I don't have the new papers yet, but when I get them, I will gladly send them over. My agreement, is 60/40 for the first $5,000. I get 60% and 70/30 for the next $5,000, and so on. This is the new agreement. We are still keeping the same % plan, but I have to cover $1,000/month. (for expenses or whatever) In return, the office will not take more than $2,500/month from me. In other words, as soon as the office gets $2500, the rest is mine. Let me know if I am not clear. Date: Jan 3, 1998 Subj: Looking for an associate position: Q: to Dr. M I have been looking for an associate position in the Chicago area for a number of months. I was wondering if you have any tips for me or suggestions as to where to look for more leads. I have been utilizing the Professional Opportunity bulletins at both Palmer College and National College. There just don't seem to be many jobs out there for a chiropractor who wants to adjust his/her patients. Any ideas? A: Being far from Chicago, I really can't direct you. What I would recommend is to contact the state associations .. not the schools .. and see if they have a listing. Next .. I'd pick an area where you'd like to work and then make as many phone calls as possible .. setting up lunch meetings or just a few minutes to stop by and say Hi. The best approach is to provide the doctor with a resume of what you feel you can provide .. is it just taking up a few hours a week .. or possibly doing some promotion .. if you have a unique purpose and can drive the practice to a higher level .. you will have a chance to get a position. I tell my students that an associateship position should be transient unless you feel that is the direction long term for you. If it is a temporary position ..then use it as a testing ground to build something for yourself at a later date .. a time to experiment and be damned if you do and damned if you don't .. but learn from mistakes for the correct approach when it's on your turf. This may sound confusing .. but if you came to my office .. and discussed with me a direction you wanted to go and how it would enhance my office .. I'd think twice. Letters won't cut it .. phone calls are best .. possibly set aside a few days and make the calls so you can visit a few per day. Date: January 4, 1998 Subj: Associate Contract From: NeilJay@aol.com Employee Contract This agreement is made as of the date of _________ at _________ between __________ hereinafter known as RCC and Dr. ________ hereinafter known as Doctor, and shall continue in full force and affect until expressly terminated under its terms. Recitals RCC presently maintains a successful chiropractic practice in the city of _________ and Doctor is a Doctor of Chiropractic duly licensed as such under the laws of the State of ________, Now therefore, it is hereby agreed, Article 1 Practice Agreement Section 1.1 Space and Services RCC will provide Doctor on a non-exclusive basis the use of office space, facilities, equipment, charts, demonstration and instructional materials which RCC maintains in its practice. Doctor shall have and claim no right of exclusive use or ownership of said facilities unless agreed to by RCC in writing. Section 1.2 Treatment of Patients by Doctor Section 1.2.1 Doctor hereby expressly agrees to furnish service to RCC as a practitioner of chiropractic, by making himself or herself available for chiropractic care of patients of RCC during established office hours of RCC. After one year of employment Doctor shall be entitled to five (5) working days of vacation with RCC providing a replacement for the five (5) days only. If Doctor finds it necessary to be out more that this period of time, Doctor must pay replacement doctor's fees. Doctor__________ RCC ___________ Date ___________ The Doctor shall contribute his best professional and business skills and services at all times for the benefits of RCC. The Doctor agrees to devote such of his time and energy to perform the duties and responsibilities assigned to him by RCC. The duties and responsibilities assigned to the Doctor shall be consistent with the duties and responsibilities normally assumed by a chiropractor employed by RCC, and shall continue to primarily be designed to build the practice and provide quality chiropractic care to as many people as possible. Section 1.2.2 Doctor hereby expressly agrees that patients of RCC, during the term of this Agreement, including patients referred by other patients, regardless of whether such referral is to Doctor or RCC in its own name, as well as the names of the patients, patient mailing lists, health care records and all other patient information of any kind, character or description, including but not limited to instructional material concerning the methodology of chiropractic care used at RCC are and shall remain the trade secrets and property of RCC which Doctor agrees to keep on a confidential basis and to make no disclosure thereof unless required by law. Section 1.2.3 Further, Doctor specifically covenants and agrees not to make any duplicates, copies, or reconstructions of such material and that if any such duplicates, copies or reconstructions are made they shall become the property of RCC upon their creation, provided, however, no cause of action for recovery of the material or for breach of this covenant shall accrue until Doctor becomes personally aware of such breach. Section 1.2.4 Should Doctor terminate his employment with RCC whether of his own volition or because of having been terminated by RCC, Doctor will promptly return to RCC all such patient lists, written materials of any description whatsoever in any way related to the patients of RCC and the chiropractic care of such patients, including any duplicates, copies, or reconstructions thereof. Doctor__________ RCC ___________ Date ___________ Any violation by Doctor of this prohibition shall entitle RCC to immediate injunctive relief in a court of competent jurisdiction. Section 1.2.5 In the event of termination of this Agreement the Doctor agrees not to solicit patients of RCC for future chiropractic services. In addition, in the event of termination of this Agreement the Doctor shall in no way orally or in writing inform patients of his decision to leave the practice of RCC. Section 1.2.6 All patients receiving chiropractic by said Doctor not at the usual and customary fee of RCC shall have said fee approved in writing by the corporate offices of RCC before said fee applies. If the Doctor chooses to offer "charity work", such chiropractic services must be rendered after established RCC hours and at Doctors own expense. Doctor hereby agrees, that while under contract with RCC that he/she will not practice chiropractic in any location except the office of RCC. Section 1.2.7 Doctor hereby agrees to follow and abide by all RCC Office Practice and Policy Manuals as furnished by RCC. Article 1.3 Administrative Services Section 1.3.1 RCC shall furnish within its own discretion and at its own expense administrative staff and personnel reasonably necessary during regular business hours to schedule and deliver chiropractic care to the patients. Doctor shall be entitled at reasonable times and places to share on a non-exclusive basis services of RCC receptionists, appointment clerks, and other staff members. Doctor shall fully cooperate with said staff so that they may perform their duties in an efficient and professional manner. Doctor shall treat RCC staff in a considerate and courteous manner at all times. Any complaints or disputes concerning RCC administrative staff shall be reported and resolved by the officers of RCC. Section 1.3.2 RCC with Doctor's full cooperation and acceptance, shall prepare maintain and perform all reasonable necessary services in connection with billing chiropractic patients of RCC for Chiropractic services rendered. Doctor__________ RCC ___________ Date ___________ RCC will provide all reasonably necessary patient debt collection services. Doctor hereby expressly agrees not to bill or collect sums due from patients except through RCC administrative staff under the direction of the officers of RCC. Section 1.3.3 Doctor promises to keep the premises and the equipment and the supplies therein, in a good state of repair and agrees to commit no waste or damage upon the same. Section 1.4 Compensation of Doctor Section 1.4.1 The Doctor shall be paid gross salary in the amount of $595 per week, paid bi- weekly for the duration of this agreement. All compensation to the Doctor shall cease upon the date of his termination of the relationship created by this Agreement. Article 2 Termination Section 2.1 Doctor herein agrees to furnish services to RCC as a practitioner of chiropractic for a period of not less that one (1) year from the date of this contract. Section 2.2 During the initial 90 days of this agreement, the Doctor shall be employed on a trial basis. During that time, either party may terminate the agreement and employment of the Doctor without penalty. Section 2.3 It is hereby understood and agreed upon that if Doctor is in breach of this contract, Doctor hereby agrees that RCC is entitled to relief in the amount of $10,000 and Doctor agrees to pay said amount to RCC within the period of sixty (60) days from the date of the infraction. Section 2.4 Should Doctor be reprimanded or convicted by the Georgia Chiropractic State Board and/or any of the courts of law for sexual harassment he will be responsible for one-half of the attorney fees and will be dismissed immediately. RCC reserves the right to terminate Doctor without notice for good cause. Doctor__________ RCC ___________ Date ___________ Section 2.5 Goodwill and Covenant Not to Compete. It is expressly understood and agreed by Doctor and RCC that upon the event of termination, Doctor agrees not to practice chiropractic within twelve miles of 590 Cobb Parkway, S.E., the location of RCC, for a period of not less that one (1) year thereafter. It is expressly understood and agreed that a breach of this convenant not to compete by Doctor would cause irreparable and immeasurable damage to RCC, and that, therefore, the parties agree that in the event of such breach by Doctor, RCC will be entitled to injunctive relief from a court of competent jurisdiction to enforce this provision. Further, as liquidated damages, and not as a penalty, RCC shall be entitled to recover from Doctor the sum of the following amounts: Ä as partial reimbursement for the applicable promotional, advertising and other practice development costs, $500 for each patient of RCC who becomes a patient of Doctor. It is further agreed that if for any reason the court shall hold that this Article is not enforceable in toto, then this Article shall be enforced to the greatest extent permitted by such court. Article 3 Indemnity Section 3.1 Doctor shall hold harmless and indemnify RCC for any claim, loss, or damage, including reasonable attorney's fees and court costs, stemming from chiropractic services by Doctor and arising out of Doctor's use of the equipment, supplies, personnel and office space on the premises or in the event of breach of this contract by Doctor under the provisions of this agreement. Article 4 Liability Insurance Section 4.1 Doctor shall at all times during the term of this agreement, procure and maintain, professional liability insurance insuring Doctor and RCC from and against all claims and actions arising out of or due to the rendering of any services by Doctor. Doctor__________ RCC ___________ Date ___________ Such insurance shall be written in a minimum amount of not less that one million ($1,000,000) dollars per person and three million ($3,000,000) dollars per occurrence. Doctor shall provide proof of adequate insurance to RCC within ten (10) days of this contract and once per year thereafter. Article 5 General Provision Section 5.1 Monthly meetings. The Doctor shall be required to attend bi-monthly meetings and seminars sponsored by RCC at location to be selected by RCC. Section 5.2 Outside Employment. The Doctor will not be involved in any outside money making jobs or schemes, whether full time or part time, that are not a part of RCC. Section 5.3 Miscellaneous. The provisions of this agreement are intended to be individual and severable, and if any such provision is found to be invalid or unenforceable by a court of competent jurisdiction the remaining provisions shall nevertheless continue in full force and effect. This agreement shall be construed under the laws, rules and regulations of the State of Georgia. This agreement contains the entire agreement of the parties concerning its subject matter, and supersedes all agreements of the parties entered into prior to its date. No subsequent alteration, amendment or modification shall be binding upon any of the parties hereto unless reduced to writing and signed by the parties. This agreement shall indure to the benefit of the heirs, assigns, and successors of the parties, and be binding on them. IN WITNESS WHEREOF, the parties have duly executed this Agreement, to be effective upon the last date set forth below. Dated: Office By_____________________________________ Office D.C. Dated: Doctor By_____________________________________ Associate D.C.