Use your practice contract to ease into retirement

Contract Language. By Steven M. Harris, AMNews contributor. May 5, 2008.

CONTRACT LANGUAGE

A column examining the ins and outs of contract issues

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As physicians in the baby boomer generation approach their "golden years," they are starting to look for an alternative arrangement that will allow them to make the transition into retirement.

While you might not be ready to hang up your lab coat permanently, you might be interested in working fewer hours and taking less call.

Whatever the road to retirement, it requires more than simply removing your name from the office door. If you are a physician nearing retirement, it is important that you plan, discuss and make contractual agreements that will allow you to accomplish your goals and changing needs.

The structure of your practice will determine your options and the legal documents that govern them.

For example, if you are the sole physician in your practice, you are faced with two options. One, dissolve the practice. Or, two, sell the practice to another physician. If you sell your practice, you will need an attorney to draft an appropriate purchase agreement. This agreement should include a valuation of the practice and describe the rights, responsibilities, and liabilities of the purchasing and selling parties.

If you are practicing under an employment agreement, it should describe the procedure and time frame for retirement. The agreement should provide language similar to the following: "Employee or Practice may terminate this Agreement without cause upon sixty (60) days prior written notice ...." Often, retirement is addressed separately within the terms of the employment agreement.