Kyle Claussen is an attorney and CEO of Resolve, a physician employment contract review and negotiation company.
Resolve “was the brainchild of a physician who was teaching residents and fellows about the business of medicine,” said Claussen. “He had a course he ran them through every year that answered questions like: How do I find a job? What should I look for in my first contract? Are the terms fair?”
A lot has changed in the physician job market since then, but the demand for professional contract review and negotiation has only grown. While for decades the majority of young physicians chose private practice, most today are going the employment route.
“For a long time, when doctors were leaving training, they would typically join their colleagues on a partnership track of one or two years,” he said. “They were going to be business owners. They would own ancillary revenues, surgery centers, things like that. Today, it's the opposite.”
Most physicians transitioning to practice now are joining large health systems, Claussen noted.
“They're going into an employed setting—W-2 positions—and they don't own any ancillary revenues in those setups,” he said. Rather than negotiating employment contracts with colleagues, physicians are more often seeing administrators or attorneys on the other side of the table. “Compensation was always there. Malpractice insurance was always there. But who you're negotiating with has probably been the biggest change in the last 10 years.”
Why expert help matters
“There's two pieces to this,” Claussen said of the transition to practice.
For starters, “It’s the first time when residents and fellows have a choice. When they’re coming out of their programs and choosing a location and choosing an employer, it's the first time they have any control,” he said.
The second piece is “it’s the launching point for their financial future,” he said, noting that many physicians transitioning to practice carry hundreds of thousands of dollars in student loan debt, which needs to be accounted for immediately.
“When something is this important, you ought to be educated on it. You need to know what you're signing. You need to make sure you will be treated fairly and protected from contract risk," he said. “Physicians are well trained in medicine, but there’s not a lot of training still today on this topic. So we think it's extremely important to get expert help.”
There’s no time to lose
“Roughly 50% of physicians will leave their first job within two years,” Claussen noted. “We think a lot of that is because of missed expectations, where physicians were told something in their interviews, but their contract said something else, and then they're unhappy and they leave.’
This is bad for everyone, he pointed out.
“Recruitment is so expensive—every hospital will tell you it's hard to get physicians’ attention—so we think it's important for both sides to get the contract right,” he said. “When you have attorneys and business folks who specialize in this, and it's all they do every day, they’re no different from physicians specializing in cardiology or infectious disease. You have to make sure you're getting the right expert to help you with things that are this important.”
Consider the ROI
“Most physicians today are not hiring attorneys to help with employment contract review,” Claussen said, noting that one reason for this is price sensitivity, especially coming out of residency or fellowship.
But cost is precisely why physicians transitioning to practice ought to seek professional help with their employment contracts.
“We see an average increase of around $25,000 in compensation following our review,” he said. “Because we understand what fair-market value is. So if you're willing to negotiate and have an attorney help with the process, it's about a 25x return on investment.”
AMA members receive a 20% discount on all Resolve services. With Resolve, you get:
- Custom contract review for any type of employment contract.
- Access to experienced attorneys who can negotiate on your behalf.
- Real-time, comprehensive compensation data and benchmarks to help you understand your worth.
- An instant contract-review option, powered by Resolve’s attorney-trained AI model.
- Free tools such as a contract scorecard to give a quick overview of where your contract stands.
Ready to access your AMA-member Resolve discount? Learn more now.
Think beyond the dollars too
Still, getting your employment contract right is not always about maximizing compensation.
“The one thing that we pride ourselves on is making sure our edits are effective for each physician individually,” Claussen said. “Sometimes compensation isn’t the most important thing to you, or you received a fair offer to start with. Sometimes there are other things that will have a much bigger impact on your quality of life.”
A case in point: call hours. “Especially for younger physicians who have families, time is important, so protecting their time is crucial,” he said.
Other common contract terms to negotiate outside of compensation include noncompete clauses, also called restrictive covenants.
An example from a physician client: “They terminated me without cause and you got my non-compete voided, so now I can stay in town and don't have to leave my parents, who are elderly,” Claussen recalled. “A lot of times, those things end up mattering more than an extra $10,000 or $20,000 in a contract.”
Claussen said he and his colleagues see changes to about 85% of the contracts they review.
The golden nugget: data
“A key differentiator between hiring us and doing it on your own is that the data that physicians get access to with Resolve is real,” Claussen said. He noted that Resolve offers a “a proprietary dataset, rData, which is drawn from verified contracts, and it’s done in real time.”
So no matter how many offers you get, you can determine the going rate for your specialty in your market.
“And it’s not just base compensation—it includes signing bonuses, non-competes, tail coverage,” he added. “What we see is that our compensation data tends to trend higher than other data sets because those data sets are a year behind.”
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In fact, in some specialties, such as radiology, the compensation figures Claussen and his colleagues are seeing are higher than the median figures shown in other datasets.
“Clients will wonder: How can it be that the starting offer is higher than what somebody who's been out 10 years is making? Well, it's because the market shifts quickly sometimes,” he said.
It’s also a way to join forces
Claussen emphasized that professional contract review is not, however, important only for younger physicians. Resolve handles contracts for physicians at all stages of their careers. The ob-gyn group negotiation he mentioned is a good example of why even older physicians seek contract help.
“Individually, physicians are sometimes very risk averse. They're worried about being an outlier, being viewed as greedy or demanding or something,” he said. "But they tend to lose that attitude when they're negotiating together. They become more confident. They understand what their value is because somebody in the group will say: Hey, no, that’s not right, and we have to stick together on this.”
Resolve also handles physician contract review across all states, which gives clients added confidence in the company’s data and its negotiation skills. Working with so many clients also brings the cost down for everyone, Claussen said, adding that the company’s standard and premium contract review packages feature turnaround times of just two business days for the initial consultation.
“What you're getting with Resolve is high-level expertise at a price point that's very low compared with what a law firm would charge on a per-hour basis,” he said.
Learn more with the AMA about understanding physician employment contracts.
