8 Careless Errors Physicians Make With Employment Contracts

Med school taught you a lot. But did you learn how to negotiate a physician employment contract? Especially your first one?

If not, understand that it ’s far too easy to screw up things you may not even realize you’re screwing up.

“A physician’s first employment contract is the most significant financial decision of their lifetime,” said Chase Howard, a healthcare attorney with Bochner PLLC. Howard pointed out that the average physician employment contract runs longer than 20 pages. While you might grasp basic terms, you could overlook critical details that can make or break your job satisfaction.

That leads to a cascade effect, for a job contract isn’t just about your job. It’s about your entire quality of life because that’s what the scope of your job will help determine.

We asked seasoned physicians about their biggest contract gaffes and what they would do differently. We also asked experts specializing in physician employment on how to avoid these mistakes in the first place.

Error #1: Failing to Negotiate

“Negotiating isn’t just about securing a higher salary; it’s about establishing the conditions that will allow you to thrive in your career,” said Annie DePasquale, MD, founder of Collaborating Docs.

Without negotiating, you risk entering a contract that doesn’t support your goals for work-life balance, professional development, paying off student loans, or long-term financial stability.

“Doctors should never assume anything is nonnegotiable nor should they be afraid of offending a new employer with requesting edits,” said Joyce Smithey, founder and managing partner of Smithey Law Group. “In fact, I have seen negotiations improve a relationship from the beginning,” said Smithey.

Employers understand, for example, that your happiness means you’ll stay in the job and perform. “Employers have been struggling to hire enough physicians, so I have seen more willingness to negotiate terms that are favorable to the employee,” said Smithey.

Don’t forget to talk up your strengths. “You can’t get more money or additional advantages just because you ask nicely,” said Amanda Hill, JD, founder of Hill Health Law and Guard My Practice. “Point out if you’re bilingual, savvy about the EMR, or have a special skill set such as advanced training in robotics.”

Error #2: Not Prioritizing Work-Life Balance

“As an OB/GYN fresh out of my residency, I made the mistake of accepting the first contract offered to me without negotiating. I was so eager to start practicing that I didn’t push back on issues like call schedule, bonus structure, or vacation time. Within a year, the demanding call schedule was burning me out, and the lack of good benefits had me second-guessing my choice.” — Matthew Casavant, DO, owner of South Lake OB/GYN & Advanced Surgery in Clermont, Florida.

Even if the salary looks good, issues like call schedule and paid time off can have a huge impact.

“If you’re a new employee in a system, you’re going to be a grunt worker, so they’re going to put you on call,” said Matthew Vuckovich, a partner at The Gilbert Group offering “ surgeon agent” services. But a demanding call schedule paired with a lack of benefits, like vacation time, can be a recipe for burnout.

While paid time off in first positions is generally anywhere from 3 to 6 weeks, Vukovich said it doesn’t hurt to ask for more.

Error #3: Overlooking the Noncompete Clause

“Early in my profession, I accepted a collaboration with a treatment center since it sounded like a fantastic possibility. I didn’t find out the noncompete clause was significantly stricter than I had thought until much later. For many years, this restriction seriously hampered my flexibility and professional growth since it kept me from working with other facilities within a 50-mile radius.” — Ashley Murry, LCSW, chief clinical officer at Sana Lake Recovery in St. Louis.

Noncompete clauses have been making headlines with organizations working to eliminate them. In fact, the Federal Trade Commission voted in April to ban them in regard to workers in for-profit companies, which may change the game for many doctors.

“While the regulatory and legal environment around noncompetes is evolving, individual circumstances can still be incredibly impactful,” said Todd Baker, CEO of Ohio State Medical Association.

“Assess what the mile radius relates to — make sure you are clear on understanding if it relates to the facility that you mainly work in, or any facility owned by the employer,” Baker explained. The latter, for instance, could significantly expand the geography where you are prohibited from working.

Gigio Ninan, founding partner and CEO at the law firm Shankar Ninan & Co., said he always negotiates noncompete clauses. “I typically like to ask for 5-7 miles max, and if the radius eats into another state, I carve out an exception for the other state,” he said. He said noncompete clauses should also be limited by scope — that is, practice areas or specific procedures.

Error #4: Breezing Past Malpractice Insurance and Operating Room Time

“I wish I had negotiated harder on malpractice insurance and operating room time in some of my earlier contracts. When you’re just starting out, facilities may try to take advantage by charging higher rates. Negotiating respectfully and providing data to support your position can often lead to much better terms.” — Thomas Jeneby, MD, a cosmetic surgeon in San Antonio.

Jeneby eventually discovered he was paying nearly double the rate of his colleagues for the same malpractice coverage. He collected data, brought it to his group, and leveraged that to negotiate a lower premium, saving him tens of thousands of dollars.

Operating room and procedure fees are another area where new surgeons may overpay. Jeneby researched prevailing charges in his area to make a case for fairer fees. “The key is to approach these discussions professionally and with an open mind,” he advised.

Error #5: Jumping Too Fast at a Signing Bonus

“Once, in my early career, I agreed to take a signing bonus without much thought to repayment obligations required for such an arrangement. Later, I found that if I wanted to leave the practice prior to the end of the contract term, I’d have to pay back a lot of that bonus, which put a hurt on me financially.” — Sham Singh, MD, a psychiatrist at WINIT Clinic in Santa Monica, California.

Elizabeth Esparaz, MD, a physician coach, recommends “ensuring that the sign-on or moving bonus is prorated over a set number of years so that if you need to leave the practice, you are protected from having to repay the entire bonus.” She also advises making sure your contact is clear in terms of how much you would owe.

And if you don’t see a signing bonus mentioned, don’t be afraid to ask for one, as this can beef up your compensation. “It’s as simple as: You never know unless you ask,” said Laura Lauth Andrews with Lauth O’Neill Physician Agency, LLC.

Error #6: Not Protecting Your Intellectual Property (IP)

“I did not put adequate weight on the intellectual property and research contribution provisions of the contract. This I learned the hard way when, much later, I found myself involved in research and publications, with my early contract claiming ownership of any research or materials developed by me during its tenure.” — Singh.

IP issues may not always be negotiable. And if you’re a physician who doesn’t intend to participate in research or product development, it can be a nonissue. But Howard recommends discussing it with a potential employer. “You want to ensure that anything you create, develop, or invent on your own time and with your own funding remains yours and will not become property of the employer,” he explained.

“In an academic setting, there are generally very comprehensive and restrictive IP policies, and those employers are almost never willing to amend them in any way,” explained Andrews. But employers that are not academic may be willing to make exceptions for work or plans that are already in progress.

Error #7: Underthinking Compensation Models

“The contract had an incentive structure based almost entirely on the volume of surgeries performed, with minimal consideration for patient outcomes or satisfaction. This created a high-pressure environment focused on quantity over quality, which is not ideal for patient care or physician well-being.” — Robert McLaughlin II, MD, an orthopedic surgeon in Boston.

“Doctors should understand the compensation, ownership, and management structure of their offer,” said Lauri B. London, partner with the New York–based law firm Cohen & Buckmann, P.C. Along with the salary, it’s important to consider bonus incentives, equal share models, and revenue value units.

McLaughlin wishes he had negotiated for a more balanced incentive plan that included metrics like patient satisfaction scores, clinical outcomes, and perhaps even peer reviews.

There are also other buckets of “income” that are not always obvious, which Hill highlighted, like CME [continuing medical education] reimbursement, supervisory pay, and on-call stipends. “Ensure your contract stipulates that you will be paid or reimbursed for these,” she said.

A pay structure can also clue you into the culture and values of an organization — how they treat employees and approach patient care.

Error #8: Not Planning an Exit Strategy

“I overlooked how important exit strategies are in contracts. I didn’t negotiate a clear and reasonable termination clause, especially those concerning ‘without cause’ terminations. [Later] I wanted to shift to another practice, but the notice period was much longer than anticipated.” — Singh.

“Without cause termination rights are present in virtually every single physician employment agreement. If it’s not there, that is a huge red flag,” said Andrews. This gives the physician and employer the right to terminate, for any reason or no reason at all, as long as they give the other party a designated amount of notice, commonly 90 days.

This can be a double-edged sword, warned Andrews: “A physician will want a shorter notice period if they are the one wanting to leave.” But in the case of termination by the employer, “the physician will want and need a longer notice period to ensure they are able to find a new job.”

The Best Advice of All? Ask for Help

Lawyers are expensive, but having one look over a contract can pay off in the end, especially if they can flag things you may not have noticed and offer suggestions. Doctors’ agents, representatives who doctors pay to advocate for them in employment situations, are a newer option.

Remember: “It’s important to be able to express what is important to you and what you expect from your employer,” added Zainulabedin Waqar, MD, an internal medicine hospitalist at Mercy InterMed Associates and an alternate delegate to the OSMA Young Physicians Section. “There will never be a job that has everything you want, but there can be a job that is a good fit.”