Don’t Let This Happen to YOU! Files from the Left Side of My Desk…

July 1, 2012 | |

Like most of the doctors reading this, we have both a preventive, and a remedial, side to our practice.  I much prefer the preventive work: helping doctors to implement employment-law instruments (before they get into trouble!) that save them enormous sums of money, not to mention personal stress and productive time.  Those files are so satisfying! Clients are invariably thrilled.  They call and email with happy reports about how much they are enjoying their practice now, how much more profitable they are, and how they sleep so much better at night.  Those files i keep on the right side of my desk.

On the left side of my desk are the more challenging files: where a significant problem has already occurred before the client called us or had any preventive work done.  We offer you this peek at a very typical file on the left side of my desk with the fervent hope that it will help you to avert a similar disaster.while all names and identifying details have been changed to protect confidentiality, the facts are so tragically common that this could actually refer to any number of similar files.

Dr. Novo had practiced as an associate for several years before mounting the experience, courage and financing to buy his own practice.  He found a practice in a nice community that would be a wonderful place to raise his young family.the practice was well-established as the vendor, Dr. Antiquues, had opened it about thirty years ago.  Dr. Novo liked how long-standing all the staff were, as it gave him confidence that there would not be any significant employment problems.  Dr. Novo was a clinical guy—he just wanted to practice dentistry and hoped to buy a turn-key operation that would not require that he spend a lot of time managing or exercising business skills that he did not feel he had (and frankly had no interest in developing).  Dr. Antiquues had, for years, been leaving the office early virtually every day to pursue his much-loved fishing hobby yet the office continued to function well without him, apparently.  This seemed to be just what Dr. Novo was looking for.

Dr. Novo contacted “his lawyer” – that is, the only lawyer he had ever dealt with.this was the same lawyer who had prepared Dr. Novo’s wills, handled his brother’s divorce and helped their teenage nephew with a reckless driving charge.  He also contacted his accountant, who was a long-standing friend of his parents.

Both his lawyer and his accountant moved the deal quickly through the due diligence process to closing.  Dr. Novo asked both the lawyer and the accountant whether he should
implement written contracts with the staff and they told him this was not the time to do it! His advisors did not raise any significant issues and Dr. Novo soon found himself the proud
new owner of a long-established dental practice.  He moved his family into a beautiful, heritage home in the community.  Everything seemed story-book perfect.

Reality quickly set in.

As the days and weeks passed, Dr. Novo started to see things from a different perspective, now that he was on the inside of the practice.the most obvious problem, from Dr. Novo’s
perspective, was that the office was not Practicing a level of dentistry that he felt should be expected.  Yet when he tried to implement reasonable changes, the staff were extremely resistant.  Dr. Antiquues had stayed on as an associate for six months to help smooth the transition.  Once Dr. Antiquues left, it seemed to Dr. Novo that all hell broke loose.the staff
increasingly took the attitude that it was “their” practice.  In their view, the patients all came there because of them.  The staff did not see that any changes needed to be made as the way they always did things seemed to work perfectly well.  They simply refused to learn the new computer system.  Dr. Antiquues had been paying them for years even though they virtually stopped being productive once he left the office early every afternoon.  When Dr. Novo suggested that it was not economically feasible for him to continue doing that, they threatened him with constructive dismissal lawsuits.  After all, he could not take money out of their pockets without their consent.

All of the signs that Dr. Novo had viewed pre-closing as indicating good management and strong employment situations, he now saw (belatedly) were just indicia of complacency on
Dr. Antiquues’s part.  The staff were simply running the show.  They had not had a boss in a long time and did not want one now.  They saw Dr. Novo as a youngster who did not know nearly as much about dental offices as they did.  Who was he, the upstart, to come in there and start telling them what to do in “their” office?

Dr. Novo became increasingly frustrated, stressed and unhappy.  He was not a confrontational person and did not like the hostility in the office.the staff sensed that he was afraid of them and they increased their bullying mercilessly.  Dr. Novo was distraught that he had taken on the better part of a million dollars in debt to end up in this situation. He started to hate going into work.  He had trouble getting up in the morning.

As the weeks passed, the misery spread to his home life.  His wife was concerned about him and missed his normal personality.  He barely played with their baby any more.  As the weeks turned into months, his wife began to get impatient.  Finally, she gave him an ultimatum to call our office that day or list the practice for sale.

He called our office and we implemented a Practice ProtectionPackage™ for him that dramatically changed his practice.  We have been able to reduce his overhead significantly and dramatically improve profits.  Most importantly, he really enjoys his practice and his family is happy.

But the point is: to get here cost Dr. Novo many times moremoney, stress and time than it should have.  We could haveobtained for him this excellent situation without his going through all of that grief. here is what he could have donedifferently (and what you should too):

1.  If you are a purchaser, the “gold standard” is to look for a practice with its employment law issues already inorder: proper, written contracts and policies with all staff.  The silver standard is to make the purchase conditional on implementing proper contracts.  The bronze standard is to implement contracts yourself as soon as possible post-closing.
(The process should ideally be started before closing.)  The earlier you seek expert employment law advice, the more advantageous we can make your position.

2.  As a practice owner, you need expert advice in severalkey areas, including accounting, corporate law and employment law.  Your advisors should be specialized both in terms of the substantive area and the industry.  Employment law is replete with traps that catch the unwary.  We have had too many clients over the years who ended up spending tens of thousands of dollars unnecessarily because they followed employment law advice from a
non-specialist.  Don’t let this happen to you.

Bottom Line:This article presents a typical case study of a dentist who would have benefited from the guidance of an employment law expert.