Forget comfort zone: Do your homework before signing that deal

I am a strong believer in the adage, "the harder you work, the luckier you get." But old adages usually come with caveats. Perhaps a better expression might be, "the harder you work, the luckier you get unless you don't work smart."

Allow me to illustrate why the latter is more accurate:

I recently met a Harvard-trained physician who shared with me more than I wanted to know about his professional and business life.

He was about 50 and had just opened his own specialty practice. Yet he complained he was awash in start-up debt. How could this be, I wondered, since my parents always told me that all physicians are loaded with dough?

Well, the doctor proceeded to tell me that, after his fellowship, he went in with some other specialists who promised him a great partnership deal and kept on making promises. After 10 years, he realized that he might never really get to be a partner, so he decided to move on.

Then, of course, he bet big on the Internet bubble and margined his way out of most of his savings. Next came a series of associate jobs, none of which really "worked out." And now he's a boarded specialist with virtually no money.

How can this happen to a health professional in this meritocracy we call America? Unfortunately, in the pursuit of economic well-being, merit simply isn't enough. As medical people, we can succeed only by exhibiting our merit alongside a strong dose of practicality and a genuine willingness to exit our comfort zone.

Defying the urge to please

My law practice is regularly contacted by veterinarians looking to escape some agreement or contract that they signed, figuring that they could, if necessary, get out of it later. When "later" arrives, they call me or some other lawyer and want to know what they need to do next because 1) their non-compete is too burdensome; 2) they aren't being paid for procedures they feel they should be paid for; 3) the buy-in offer mentioned in the paper work isn't being honored; 4) they can't afford the buy-in offer; and so on.

I always ask the same question of these veterinarians: "Why did you sign this contract with this 1) 30-mile non-compete; 2) non-specific partnership offer; 3) no description of what work would be compensated on a percentage basis...?"

They nearly always swallow hard when they answer, in bitterness or self-recrimination. Then they tell me that the other party set a short deadline to sign the document, and they just caved in to avoid disagreement or confrontation. Now these vets face, at minimum, a new fight and, at maximum, a big impediment to moving forward with their life plans.

Veterinarians need to understand that their business or professional commitment is a thing of value. Agreeing to certain terms abruptly, just because to do otherwise would be acting outside some "comfort zone," has no place in professional practice or in business.

When a partner, employer, landlord or anyone else hands you a stack of papers and asks you to sign them, it is incumbent upon you to tell that person that you will need sufficient time (weeks, not days) to review them thoroughly. If further pressure is applied, it usually means that the documents need more scrutiny, not less.

Here is an important business and legal tip: If you are not a good negotiator or shy away from serious discussions related to work or money, you need to do what other professionals do. Subcontract the task to others.

When I represent a client before the Internal Revenue Service, for example, I usually leave the client home. The meetings go faster and the audit agent is relieved of having to listen to some emotional veterinarian whining about unfairness of the tax code and how he is being victimized. Consequently, the client usually makes out better financially than he would have if he had been in attendance.

The same principle is true in dealing with employment contracts, partnership negotiations and other matters where significant money and obligations are involved. The Olsens (Mary Kate and Ashley) don't negotiate their own deals, so why should you? The few hundred dollars you might spend having your attorney or accountant help you work out a deal will be worth many times that if the deal ends up fair to you as well as to the other party.

Consider the long view

Even if you decide to go it alone in negotiating an employment agreement, lease, practice purchase or any other business deal, the project needs to be looked at from a number of different angles. Such decisions need to be fully brainstormed. The questionable issues require high-intensity research.

There may be many long-term consequences, for example, in deciding to build a practice building. (I know a group of surgeons who have been feeding a money-pit clinic for the last 10 years.)

Or, just because a veterinarian expects to move away from her first job in a year or so doesn't mean that really will happen.

If she meets the partner of her dreams (who happens to have an enormous family, all of whom are local), she may eventually wish that she had not blindly signed a 20-mile non-compete clause.

You can't afford to be careless

A famous financial guru was asked how he had accumulated a fortune in the stock market over 40 years. He replied that the most important factor was that he made sure not to make any really big mistakes early on.

When you are older and financially well established, a business screw-up or two is not economically devastating. However, for a young veterinarian to join up with another naïve or manipulative practitioner in a poorly-thought-out practice or partnership arrangement, the outcome can be financially perilous. One bad move along those lines can put the doctor in a deep hole which may be very, very difficult to crawl out of.

Far-fetched? I see it all the time.

A veterinarian will call me, expressing interest in a practice for sale, but he can't come up with the funding. Why? Because he is still servicing, (in addition to his student loans), a note he signed with somebody else for the overpriced good will in some other defunct clinic. Oh, and there is also that judgment he is still satisfying for unpaid rent and taxes on the old practice building which hasn't been re-rented yet. Mix in some support payments or child-care expenses and it becomes pretty difficult to start a new practice venture.

The take-home point: Do your due diligence and carefully consider the potential consequences of your actions. Quality analysis likely won't happen if you agree to sign by next Thursday.

Christopher Allen

Dr. Allen is president of the Associates in Veterinary Law P.C., which provides legal and consulting services exclusively to veterinarians. He may be contacted at (607) 754-1510 or info@veterinarylaw.com