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  • So I did everything right, but....

    I'm currently in my third year as an attending dermatologist. I've been a WCI follower for years and following his script as best I can. First year out I made ~600k working my butt off, this year due to COVID I anticipate in the 500-600 range and I think there is room to grow in the private practice I joined. My student loans are all paid off and NW approaching 7 figures due to a variety of positive factors. I've also tried to follow WCI's "one house, one spouse, one job" line. I have two young children and don't plan for any additional and my spouse is a stay at home wife. I waited over two years to make sure my job and life was stable and we just purchased our first home a few months ago. The location is great (I bike to work in the suburbs), neighborhood is amazing, it is close to my parents/family, and the mortgage was about 1x gross salary.

    And then... I just found out that the sole owner of the practice is selling the group to a Private Equity Firm within the next month or so (no option to buy him out). My current contract is transferred to new ownership so I pretty much have to join and at least see how things go for a few months before deciding if it makes sense to stay vs jump ship. Prior to the merger, I'd say I liked the job 7/10 due to autonomy, good patient mix, proximity to home, colleagues, etc... Could use a better phone system and more staff support but otherwise I enjoyed it. Now, with the transition, who knows. There's a lot of negativity about PE out there but I will absolutely give them a chance. The good news is that by doing everything correct so far I've given myself plenty of options financially and my specialty is still high in demand anywhere.

    On one hand with where I'm at and a similar income going forward I can meet all my financial obligations and potentially be FI in my early/mid 40's (early/mid 30s now). On the other hand, I could consider switching practices, potentially move again (although I'd hate to do that), have a longer commute, or even start my own practice...all of which have lots of potential upside but also require a lot of change and upfront effort, not to mention risk.

    I guess I'm looking for some collective opinions from individuals who have gone through a similar scenario or even some of the older physicians for a little perspective. Not looking to make any impulse decisions so will test drive for at least several months but trying to outline what's next for the career. Part of me says it's just a job/business...make the money and enjoy (not necessarily love) the job and focus on other parts of your life. The other part of me will always wonder if the grass is greener.



  • #2
    Do you know anything about the entity that will be the new owner of the practice? They (and you) might be fine going forward, or not. I would try to find out more about how they run a practice. Perhaps contact some other physicians who have work for them to see how they fared.

    Comment


    • #3
      Originally posted by JK View Post
      I'm currently in my third year as an attending dermatologist. I've been a WCI follower for years and following his script as best I can. First year out I made ~600k working my butt off, this year due to COVID I anticipate in the 500-600 range and I think there is room to grow in the private practice I joined. My student loans are all paid off and NW approaching 7 figures due to a variety of positive factors. I've also tried to follow WCI's "one house, one spouse, one job" line. I have two young children and don't plan for any additional and my spouse is a stay at home wife. I waited over two years to make sure my job and life was stable and we just purchased our first home a few months ago. The location is great (I bike to work in the suburbs), neighborhood is amazing, it is close to my parents/family, and the mortgage was about 1x gross salary.

      And then... I just found out that the sole owner of the practice is selling the group to a Private Equity Firm within the next month or so (no option to buy him out). My current contract is transferred to new ownership so I pretty much have to join and at least see how things go for a few months before deciding if it makes sense to stay vs jump ship. Prior to the merger, I'd say I liked the job 7/10 due to autonomy, good patient mix, proximity to home, colleagues, etc... Could use a better phone system and more staff support but otherwise I enjoyed it. Now, with the transition, who knows. There's a lot of negativity about PE out there but I will absolutely give them a chance. The good news is that by doing everything correct so far I've given myself plenty of options financially and my specialty is still high in demand anywhere.

      On one hand with where I'm at and a similar income going forward I can meet all my financial obligations and potentially be FI in my early/mid 40's (early/mid 30s now). On the other hand, I could consider switching practices, potentially move again (although I'd hate to do that), have a longer commute, or even start my own practice...all of which have lots of potential upside but also require a lot of change and upfront effort, not to mention risk.

      I guess I'm looking for some collective opinions from individuals who have gone through a similar scenario or even some of the older physicians for a little perspective. Not looking to make any impulse decisions so will test drive for at least several months but trying to outline what's next for the career. Part of me says it's just a job/business...make the money and enjoy (not necessarily love) the job and focus on other parts of your life. The other part of me will always wonder if the grass is greener.

      That stinks. Bummer that the sole owner wasn't a little more loyal to his/her colleague of the last 2+ yrs. Interested to know what "current contract is transferred to new ownership" means.

      From what you've written, it sounds like it would take a significant downturn in job suckiness to motivate you to move, switch or start a practice.

      Being the owner or co-owner would prevent this from happening again, only you know if it is worth the change, effort and risk.

      Comment


      • #4
        Do you have any non compete. Anything that says that if the ownership is transferred you are set free.

        The private equity is buying it only because docs like you are staying. If you all leave, they have no use for the buyout. I would not stay after the owner has pulled such a fast one on me. If I don't get extra money from the sale I would start out on my own. Dermatology is easy to start solo.
        Last edited by Kamban; 10-15-2020, 08:56 AM.

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        • #5
          I would start looking but would keep all options on the table including stating.

          i wouldn’t write any angry emails.

          if they hear you’re looking around perhaps they’ll sweeten the deal

          good luck. Sounds like you’re fine either way.

          Comment


          • #6
            Originally posted by JK View Post
            . My current contract is transferred to new ownership so I pretty much have to join and at least see how things go for a few months before deciding if it makes sense to stay vs jump ship.

            My suggestion is that you look at your contract and maybe even have it reviewed by a contract lawyer. Ownership changing hands is best time to get out of a non compete or onerous terms of a contract. Once you work for a few months with the new owner under the old contract it is difficult to change those terms.

            If you still want to stay you should sign a new contract with new better terms and no non-compete. Contact the PE and state that you plan to leave since you were planning on becoming a partner and that has vanished with the owner selling the practice under your feet and you have nothing worth here that warrants you staying further.

            They want you to stay. Otherwise they will not make any money off you. So they might even take some money that might be paid to the owner and give it to you.

            Comment


            • #7
              Appreciate everyone's comments so far. Lots of competing feelings. I am keeping all options open and have reached out to a couple other practices (some reached out to me). As of right now, all the juniors doctor's existing contracts say they are "assignable" and transferable which is why the new PE group is just assuming our contracts...non compete and all. Thought about threatening to walk as some of the other doctors have mentioned but would need to give 90 days based upon prior contract. The issue is that I don't have a 2nd income (although do have an E-fund of course), I am making good money now and an alternative practice "might" be better or may not and there's also the possibility that an infusion of cash from the PE group to be more efficient may even help out some of our current woes. Plus if a few of my colleagues leave there is always a chance my patient volume could increase further.

              Comment


              • #8
                Originally posted by JK View Post
                As of right now, all the juniors doctor's existing contracts say they are "assignable" and transferable which is why the new PE group is just assuming our contracts...non compete and all.
                Wow. Note to anyone in PE takeover likely specialty, read contract carefully. Not a lawyer, so consider hiring one.. Sounds like the "junior partners" are being screwed by the sole owner. Sucks. Not much of a partnership

                Comment


                • #9
                  I’d abide by the current contract, have a lawyer look at it, and start searching/interviewing elsewhere in a discrete fashion. If things stay good, which they might, you may want to stay. If things sour, which they might, then t least you’ve explored some options and can jump ship.

                  Comment


                  • #10
                    Originally posted by JK View Post
                    Appreciate everyone's comments so far. Lots of competing feelings. I am keeping all options open and have reached out to a couple other practices (some reached out to me). As of right now, all the juniors doctor's existing contracts say they are "assignable" and transferable which is why the new PE group is just assuming our contracts...non compete and all. Thought about threatening to walk as some of the other doctors have mentioned but would need to give 90 days based upon prior contract. The issue is that I don't have a 2nd income (although do have an E-fund of course), I am making good money now and an alternative practice "might" be better or may not and there's also the possibility that an infusion of cash from the PE group to be more efficient may even help out some of our current woes. Plus if a few of my colleagues leave there is always a chance my patient volume could increase further.
                    I really, really cannot believe that will hold up at all. Your contract is with that person, and thats it. It doesnt transfer. Get a lawyer. Everyone on here acts like getting a lawyer is some aggressive crazy move but its just standard business practice.

                    I had an insanely evil contract and even mine didnt have such a crazy thing attached to it (it did stipulate I practiced for free for 1 year after, lol).

                    If you guys have woes then the practice is simply mismanaged in some manner, PE will not improve this except to move the woes onto you and the cash flow to them. Its literally the play book. If a few colleagues leave often that will cause an implosion of the practice, though derm may/may not suffer from this.

                    Get a lawyer, just because its written down doesnt make it enforceable. The incentives are highly skewed to including everything as it discourages certain behaviors and locks people in.

                    Comment


                    • #11
                      "As of right now, all the juniors doctor's existing contracts say they are "assignable" and transferable which is why the new PE group is just assuming our contracts...non compete and all."
                      90 day notice solves that! It will take more than 90 days to litigate. Still consult with an attorney.

                      Comment


                      • #12
                        Get a lawyer's help. Hypothetical- if all the drs in the group that are being transferred to the PE firm stand together and say that they will hand in their resignations if forced into a non compete with the PE firm, what will the response be? Highly doubtful that after bluffing the PE firm will want to go through with buying out a practice that HAS NO DOCTORS other than the original owner. Of course sign here or else youre fired threats may be made. But still, food for thought- who stands to really lose more?

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                        • #13
                          I agree with the others - get a lawyer. There's really no downside to doing so, and it may open up some options for you that you are unaware of now.

                          Comment


                          • #14
                            I'm also derm, and I think in your shoes I'd stick it out and see how things go with the PE takeover. I talked to some dermatologists who transitioned to a PE-owned group when I was interviewing for one, and they told me that the change had been for the better since billing was outsourced, they kept their autonomy, etc. They did not feel pressured to see more patients. I do think there are a lot of inefficiencies in clinical practice that PE may actually improve, especially since they are financially motivated to be efficient. I highly doubt they're going to exploit you right off the bat - they need you to make money! That said, I'd of course renew your contract and make sure there is no non-compete that carries over; if you hate the practice once PE takes over, then you can leave.

                            Personally I would be loathe to pick up and move in your situation, especially with your nice commute. Sometimes a 7/10 job is good enough.

                            Comment


                            • #15
                              Originally posted by Zaphod View Post

                              I really, really cannot believe that will hold up at all. Your contract is with that person, and thats it. It doesnt transfer. Get a lawyer. Everyone on here acts like getting a lawyer is some aggressive crazy move but its just standard business practice.

                              I had an insanely evil contract and even mine didnt have such a crazy thing attached to it (it did stipulate I practiced for free for 1 year after, lol).

                              If you guys have woes then the practice is simply mismanaged in some manner, PE will not improve this except to move the woes onto you and the cash flow to them. Its literally the play book. If a few colleagues leave often that will cause an implosion of the practice, though derm may/may not suffer from this.

                              Get a lawyer, just because its written down doesnt make it enforceable. The incentives are highly skewed to including everything as it discourages certain behaviors and locks people in.
                              I do a lot of work involving employment contracts (not a lawyer) - employers (Really the lawyers they hire to make these) put things they know are not enforceable in contracts all the time. The goal is to make you second guess and just roll w their punches.

                              Comment

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