The offer letter is often a brief snapshot of the most attractive aspects of the job. This is when the employer puts their best foot forward and shows you the most exciting aspects of a job. This is akin to your Bumble profile with you looking your best and is rarely the full picture nor real life.If youβre curious, this one convinced Ally to swipe right π
While that Bumble profile pic may be attractive enough to swipe right, itβs not enough to decide a long-term relationship. You need more due diligence!
The offer letter doesn’t typically have vital information about future compensation, like your productivity-based bonus structure, quality metrics, or anything about future ownership if you’re in an independent physician owned private practice. It also rarely has details around the exit strategy, such as noncompetes, nonsolicits, malpractice tail provisions, moonlighting versus exclusive employment expectations, term and termination clauses, and all the various ways physician contracts can make you pay back or give up compensation during an exit. These are often where we spend the most time in the firm negotiating, but they are usually absent from the offer letter.
What is the Typical Process?
For most first contract positions that are evaluating and negotiating their first opportunity out of training, the following is the typical cadence:
β’ First, you typically have phone interviews and then an in-person interview, or maybe multiple in-person interviews. You’re typically given an opportunity to meet and discuss the position with the folks that you’re going to interact with on a regular basis. Most of those discussions are about your day-to-day work obligations and expectations andfamiliarizing yourself with the practice. Are you a good fit? Most of the discussions are very operational in nature, like schedule, template, and what staffing may be appropriate for your position.
β’ Towards the end of that process, you might receive an offer letter. Some employers will also include the contract at the same time. Some also bifurcate these and ask you to approve or agree to an offer letter before they send you the contract.
The offer letter in most physician contract practices are relatively surface level and have some of the most attractive aspects of the job highlighted. For example, it’s not uncommon for the offer letter to be one page long and only include things like your starting base salary, signing bonus and relocation stipend, CME budget, some details about how much paid or unpaid time off you might have, maybe your schedule, whether it’s 5 days a week, 4 days a week, or maybe a 7 on 7 off cadence, etc.
Offer Letter Negotiation Strategy
Best practice is to meet with your lawyer to discuss your offer letter and consider whether you want to negotiate anything at this point, or if it’s more prudent and advantageous for you to negotiate at the contract stage. Many employers will push you to make all your negotiation requests at the offer letter stage because the most important aspects of the contract are not there! I believe this is often strategic and targeted towards improving the strength of their contracts. Itβs hard to play chess when you canβt see all the pieces on the chessboard, and the offer letter does not show you everything.
At the offer letter stage, our general advice for our clients (Your situation could be different andlisten to your lawyer) is to consider negotiating only the most mission critical aspects of the job that you need to make sure are clarified. For example, if you’re most excited about this positionbecause it offers a 4-day work week at one particular location and no weekend call, it may make sense to ask for those to be clarified at this stage. This can help you avoid wasting each other’s time with a contract that does not match the most mission-critical aspects of the job.
However, when discussing personal preferences with clients, we are most likely to recommend responding to the offer letter without a full “acceptance”. Itβs often best to signal you’re excited about the position but want to be prudent by reviewing the full contract, along with any future compensation plans and benefits packages, before making any final decisions.
Employer Offer Letter Negotiation Strategies
In the firm, we see this as simply doing your prudent due diligence before accepting a job because at the offer letter stage we don’t really know for sure what you have yet. Be prepared though. Many employers, and especially recruiters, will push you hard to make negotiation requests at this stage. But we often do not find this to be in your best interest.
Either way, be prepared for the employer to say that once the offer letter is signed, nothing can be changed, and the deal is completely final. We often believe this is more of a negotiation position, but your individual situation could certainly vary from this general discussion, and you should defer to your lawyerβs advice.
Academic Offer Letters Might Be Different
Please note that academics can vary from this general cadence. Some academic institutions will only offer you a Letter of Intent, or Memorandum of Understanding (there are several different terms used by employers), and that is the last thing that you sign. If you’re in a hybrid academic hospital employed position, or maybe considering a fully clinical billable position with an academic institution, it could be prudent to make sure you understand whether this document is the final signed document between you and the employer, or if there is another document or set of documents coming that will provide further clarity.
I realize this is clear as mud, but academic institutions are not perfectly consistent on this point, and best practice is to make sure you understand their process.
Get Legal Advice
Offer letters versus contracts are confusing. We do not want anybody to take this general discussion blog as legal advice or freedom to completely ignore offer letters in every instance. The best practice here is to get with your lawyer at this stage or earlier and set out a plan for full evaluation.
If you have any questions, please feel free to contact us. If it’s not us, we highly recommend every physician have an experienced lawyer in physician contracts on their side as they are navigating these important deals. Most physicians will make more than a million dollars in their first 5 years of practice. Negotiating a 7-figure deal should not be the time you wing it.
We wish you the best during your transition!
