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Navigating Physician Offer Letters: A Guide to Crafting Your Dream Job


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    Are the dog days of summer dragging you down? Are you a physician-in-training starting to look at jobs for next year or even the year after?  If you’re staying indoors to stay cool, why not use this time to think about interview season in strategic and proactive ways?

    If you’ve already conducted phone interviews and site visits, you may have an Offer Letter (also called a Letter of Intent, Term Sheet, Memorandum of understanding, or Offer Sheet) or two in hand. In this informative article by Contract Diagnostics the author talks about what Physician Offer Letters are and how they can help you craft your dream job.

     

    What is a Physician Offer Letter?

    An Offer Letter is a document that a candidate receives after an interview but before a formal contract that lays out key provisions such as:

    1. Compensation
    2. Initial term
    3. Location
    4. Recruitment incentives

     

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    Is an Offer Letter a legally binding document?

    Unless an Offer Letter clearly states it is a “binding” letter, it is usually open for further discussion. However, we have found that many employers feel that you have agreed to the listed terms if you have signed any offer letter in good faith. So even though we think of an offer letter as an invitation to negotiate, you should try to negotiate any terms after having it reviewed and negotiated and then sign it if you agree.

     

    What are “binding” letters?

    Binding Letters are usually offered to candidates after some back-and-forth between the parties, and significant or material terms such as compensation, recruitment incentives (sign-on, relocation, student loan assistance), initial term, non-competes, etc., have been agreed to. This can happen verbally or via email. The employer then puts these agreed-upon terms in a document that clearly states that it is a “binding” letter and sends it to you to sign before putting it into a full contract for all the parties to the executable contract. I caution candidates to still get the offer letter and the contract reviewed. There will be language in the contract not present in the offer letter. It is always wise, especially at the beginning of your career, to understand all the legalese,” even if you are told it is boilerplate and standard. You should have an understanding of both your rights and obligations under any contract.

     

    Back to non-binding Offer Letters

    The more common situation is when a candidate gets an offer letter after an interview outlining key terms of compensation, malpractice, recruitment incentives, restrictive covenants, etc. But it doesn’t state that it is binding.  It is for you to review, consider, and send back a counteroffer. It is crucial during the interview process to listen, listen, listen, ask lots of questions and not agree to any key items such as compensation, etc. We also recommend the phrase “I’m sure you’ll propose market competitive rates with the other offers I am receiving” if asked directly about your expectations. Try not to tell them what the other offers are or your current compensation. Also, it is important not to counteroffer verbally during the interview process. Get the offer letter, have it reviewed, gather data, and then make a counter. Also, if you are interviewing in multiple locations, try to have two or three offers before you counter any of them. Remember that your initial compensation and other key data points can set the baseline for your compensation going forward in your career, whether you remain at this job or switch jobs.

     

    What can you negotiate, and how can you negotiate?

    My go-to answer is that you can negotiate everything! The reality, however, is that before you counteroffer, you need solid data and rationale to support what you are requesting. Talk to your peers, your program directors and consider a professional review of your contract to obtain the most recent compensation data, recruitment incentives, and what is going on in certain states with respect to wage transparency, non-compete laws, etc. Many large employers will tell you that they will not change the language and that they are sending you a standard contract. However, most compensation information is not in the main contract, it is in the appendices, addenda or exhibits attached to the contract, so more easily be changed and updated to customize your deal.

    Once you have had your offer letter reviewed, you can then counter with a phone call that thanks them for the offer. You can tell them your story and the reasons behind your requests. For example, “I’m looking at the data I have from Contract Diagnostics for my specialty and region, and I’d like to request “X.” It is a good idea to follow up the conversation with an email in bullet points with some language to provide an explanation. Keep it simple. Unless you know that you have been lowballed, it’s not a good idea to request changes that are more than 20 or 25% of what has been offered. This is another area where a professional review can help with the most recent salary data sets. This is also the time to try to negotiate items such as who pays for tail insurance and the terms of any restrictive covenants.

    Once you’ve come to an agreement on the key terms of your offer letter, then it goes into a draft contract for you to once again review. Now is the time for you to ask for their timing in getting you a contract, which may be important if you are balancing multiple offers. You can say something along the lines of “I’m looking to make a decision by x so I would like to have the draft documents sent to me at least two weeks in advance so that I can have a professional review conducted.”

    As mentioned, there will be plenty of legal language in the draft contract that is not in the offer letter. Make sure you understand all your rights and responsibilities under the contract and all appendices, promissory notes, and other associated documents by having them reviewed before you sign. Once it is signed, it is legally binding, and hopefully, by then, you will be secure in knowing that you’ve done everything you can to create a professional situation that is collaborative, valuable, and rewarding.

     

    Are you getting paid what you are worth?

    Contact us at Contract Diagnostics and learn how to get a 15-minute phone call where we will discuss your specific situation and a better way of presenting compensation data to you. We can show you what other physicians in your area are earning by specialty and then help you optimize your compensation to give you the best chance of getting paid what you are worth.

     

    About the Author:

    Anu Murthy is an experienced healthcare and intellectual property attorney and practice consultant focusing on physicians, dentists, and advanced care practitioners. She is a Boston University School of Law graduate and firmly believes that thorough contract explanation, negotiation, and drafting are paramount to a healthcare provider’s success and protection. Over the years, Anu has held senior leadership roles within diverse healthcare ecosystems, ranging from academic, not-for-profit, and private equity sectors, where she led recruitment, service line expansion, and practice acquisitions.

    In 2020, Anu chose to return to her roots, working directly with healthcare professionals to navigate the business aspects of their lives. Her extensive experience gives her clients a unique edge in reviewing healthcare transactions, and her broad industry network offers valuable insights into market trends. Anu’s insider perspective and dedication to her client’s interests set her apart in her field.

     



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