Employment contracts are a big and complicated topic. The best way to handle your employment contract is to take a serious, balanced approach. 

You should take the time to read it carefully and take into consideration the option of having a professional look at it. If you find anything that raises concerns, you should ask for reasonable changes. 

In this post, we’re going to cover some of the basics of employment contracts, from negotiation to termination. This post will cover some basics about physician employment contracts, but don't hesitate to contact a professional if you have any doubts regarding your contract!


Negotiation can be an important part of any contract in order to come out content with your contract. However, this can be extremely nerve racking! Once you sign a contract, you’re all in, there is no going back. So you want to be sure you get the contract you are hoping for. 

Although employers will negotiate, you need to be careful. They spent a lot of time and money to recruit you, and they do not want to do it again with the contract. Most times larger organizations will refuse to negotiate contracts, whereas smaller companies may be more lenient.


For anything to be done successfully a little bit of prior knowledge is required. Screening out problem employers is always a good start. Make sure the jobs you are considering seem stable, and that the employer seems fair and genuine. If not put them to the side and move on.

Many people are worried about inquiring about their requests. It’s okay to have requests, however, make sure you are bringing them up right away. Start telling them during the interview what you are looking for and what your expectations. This way you can be clear and on the same page from the beginning.  If they agree, be sure to get it in writing, verbal assurance doesn’t mean much. 

Negotiating the Letter of Intent

Also known as an “offer letter”, the letter of intent will be a quick overview of the contract from things like termination policy to job obligations and salary. 

Although this is not the contract itself, you should take it just as seriously! When signing this document you should first review it. If you find anything you do not agree with, negotiate it! 

You can use this document to determine the value of the offer and if it is worth it to pursue further negotiations. At this stage, it may be wise to hire a professional to review it with you and advise changes.

Keep in mind that the terms and conditions in the Letter of Intent can be used against you in the negotiation stage of the contact. So be sure that everything stated in the document is approved by you as well as the employer. 

Reviewing the Contract 

Getting the contact can be overwhelming, typically an 8-30 page document, this can seem too long to sit down and read carefully. Remind yourself that these are the terms and conditions that you will be working under. 

First, you will need to carefully read the contract, read each section more than once. While reading the contract, keep notes and a list of changes or concerns you may have. Prioritize these provisions in order of concern. Start with the parts you see as deal breakers, then move on to the terms you would be willing to compromise on. 

After you are confident that you understand the contract and have made a list of your changes, let the employer know. Send them a clearly written document with the provisions you are looking to make and the new language you would like to have in the contact. Keep in mind it may take a few days to hear back, you also may be asked to discuss these changes in a meeting or over the phone. 

Negotiating the Contact

Many people can be intimidated by the negotiation stage. Keeping in mind some basic tips can help you to be more successful in negotiations and give you confidence while negotiating. 

Be prepared, if you are negotiating in person or over the phone, have notes and points that you want to cover, practice your pitch and be confident enough to back up your changes. 

Keep in mind compromises are always an option. It is very common for employers to have a counter offer that may result in a compromise. As long as this change works for both parties, then a compromise is a great option for you!

Have an escape route. You may have heard the phrase don’t put all your eggs in one basket... This is a prime example of when that phrase is true, always have a backup plan. With no other offers, you may feel pressured to accept any conditions in order to seal the deal. 

With these few tips in mind, you can be prepared for the negotiation and be successful. Keep in mind that if you have any issues or doubts, hiring a professional is always a good option. 

Payment & Compensation

If you’re a new physician looking at your first compensation, it may be hard to wrap your head around it. With what you may have been making in the past, younger physicians either overestimate or underestimate compensation. 

You will see that many compensation packages offered to new physicians will be dependent on regional and market factors. A good way to predict fair compensation is to see what the earning of other related physicians make in your area.

Negotiating Your Compensation

What some physicians view as the most important part of the contract, it is important that you are careful when negotiating your compensation. Understanding some basics of compensation negotiation can really help you when negotiating with your employer.

Many times the contact will have a very generous guaranteed salary for the first few years, but then the compensation will decrease when switched to the formula. In order to avoid taking a pay cut after a few years, be sure to focus on the formula and make sure it is clear what you will be receiving. 

The base salary should be your main focus. This should be based on the MGMA median. Watch for one-time payments. When the employer offers you a big signing bonus, keep in mind that a one-time payment won’t make up for the long-term payment. Although this bonus may be a great incentive that you could use right away, look at the big picture before making any decisions. 

Pay attention to what your compensation entitles. Often a bigger salary can mean more work for you. Often in the fine print, there are hidden requirements like extra call or many others. Make sure you are clear on what the responsibilities are based on your salary. 

Also, pay attention to what your salary will be based on. It is not unlikely that your compensation could be based on the practice income, minus expenses. This is where you need to pay attention and see if your salary will be based on your collections or other options. 

Although this is a starting point for reviewing your compensation, it is always beneficial to hire a professional to make sure you are understanding the contract and getting what you are looking for. 

Reviewing Your Duties & Responsibilities

Many contracts will provide a list of duties and responsibilities specifically for you. This section is often overlooked by physicians, as you may view is at simply a job description. And after working as a resident and possibly a fellow, the description may seem fairly self-evident. 

Looking at this portion of the contract in a different light could prove beneficial. Consider this as a list of expectations. This is what you are being hired to do, and they are the core functions of your job. 

These provisions display the physician’s duties and responsibilities to the employer. What you are required to do, where, and how they will be expected to perform go beyond a simple job description to being a crucial aspect of any physician employment agreement.

Don’t underestimate the importance of this section, after signing your contract, it is very difficult to undo these obligations. A detailed list of the specific proposed duties should be negotiated and clearly articulated in the employment contract. 

For example, appointment hours, hospital rounds, office duties, call schedule,  medical record documentation, and review of tests and lab results.


Although termination may be something you do not want to think about, it is one of the most important parts to review! It shows how both parties are able to exit from the relationship. 

Most physician contracts have a set term, plus provisions for early termination before the set term expires. The grounds of early termination can be either “without cause” or “for cause.” 

Depending on which cause your contract states could influence the way you negotiate your contract. It is important to review with this in mind and always consult a professional if you are unsure about what your contract entitles. 

“Without cause”

“Without cause” is dangerous because it means the employer can terminate the physician any time for any or no reason at all. This termination policy usually comes with a notification period. With the without cause termination, you have very little recourse against the hospital, unless the termination was motivated by illegal reasons. 

“For cause”

A physician with a for cause policy can be terminated for breaking the contract, but there is no notification period and they could be required to pay for tail coverage.  If a “for cause” reason to terminate you is vague or general enough, it can give the employer a way to fire you without cause and without a notification period. This is important because "for cause" reasons for termination are much more punitive, they don’t owe you bonuses, and there’s no notification period.

In order to make sure that the termination is exceedingly clear, it's important to thoroughly review your contract so that you aren't surprised by vague termination causes that could leave you open to termination without notice.

The contract is the difference between your dream job and a nightmare. When reviewing your contract remember that negotiation is an option and may be very helpful to you and your employer, and again if you are unsure or need help always contact a professional.