Breaking Up Is Hard To Do
by Leslie M. Wise, D.C.
Pundits tell us that two things in life are certain; death and taxes. Others would add divorce (in 55% of American marriages). To this depressing array I would add another reasonably inevitable occurrence, i.e. the unhappy dissolution of chiropractic associateship arrangements.
I know that there are exceptions, because I, myself, was in an amicable, peaceful arrangement with another chiropractor for 16 years. That arrangement ended well, and we continue to be best of friends ten years later. But the unfortunate likelihood remains that associateships, independent contractor arrangements, employment contracts, and even buy-outs will end with everybody involved filled with rancor, bitterness, hatred and homicidal thoughts.
A 1982 no-compete clause in a South Carolina practice transfer, ended with attempted murder, arson, conspiracy, and an untimely death in an ultra-light air crash followed by revocation of a chiropractic license. You piece together the puzzle! Suffice it to say that it was a low point in relationships between chiropractors. While we know that most disputes don’t end up with arson and murder, many end up in the court system, which can generate its’ own swath of devastation.
One of the no-brainer reasons for the increasing number of associateship disputes is the simple fact that there are a lot more associateships today. A few decades ago a new D.C. had the choice of starting a new practice or teaching in a chiropractic college. Associateship opportunities were rare, and were often family based. The increase of college tuitions and associated expenses by tenfold over the last thirty years has created the nearly inevitable baggage for new graduates of the $100K+ student loan indebtedness. This burden makes it difficult to borrow money to start a practice, so consequently we have a large number of graduates looking for a job.
Established chiropractors may see hiring the newbie as a way to increase the productivity of a practice, and make a lot more money, while sharing a small portion of the increased profits with the new kid on the block. We now have a perfect environment for festering hostility, unhappiness and the pre-ordained ultimate “breakup”.
In my experience of counseling recent graduates, both before and after they get involved in associateships, I have seen some common threads which may make it easier to deal with some problems of these relationships, and avoid others.
- You must have a contract in writing! I’m amazed that both parties are often willing to start an associateship, with the attitude that things will be worked out as they arise. This is a sure formula for disappointment and dissatisfaction. Don’t do it! Obviously, the established D.C. has the upper hand here and will structure the contract to protect his interests, but it must be livable for both parties.
- Have a clear delineation of duties, work load, hours, and the formula for reimbursement. I frequently remind my students that 40% of nothing is nothing, and that’s how much you’ll be paid if you don’t see any patients.
- Have a clear understanding of the method for assigning patients to the new doctor. Many potential patients may have a preference for the more experienced doctor, but some equitable distribution is necessary.
- Both parties may prefer an Independent Contractor status for the associate, but the IRS has a clear cut formula for determining that, and it is biased toward Employee status. The issues here are withholding of federal taxes and Social Security taxes.
- The best way to enter a relationship is to pre-plan the breakup. Have a clear understanding, in writing, of what will happen upon dissolution of the relationship. The frequent issues here are about “ownership” of the patients or the patient files. No compete clauses and anti-solicitation agreements are frequently the source of much friction in professional breakups, and should be clearly understood by both parties in advance.
It is my opinion that associateship arrangements should be seriously and thoughtfully considered by both parties, and entered only after all questions are answered, and everybody is satisfied.