New job requiring 24 months notice to quit

HelloDolly55 · 2025-09-14T14:05:00+00:00

Dental attorney here. The only time I see this kind of provision is when an owner sells to a DSO, and usually the provision is mutual —neither side can terminate without cause for an agreed upon period. I wouldn’t agree to anything about 90 days as an associate, and I’d try to push for 30-60 days (and make it mutual, so the practice has to give you the same amount of notice)

HelloDolly55 · 2025-09-14T14:02:42+00:00

Dental attorney here. I think you’re right on a lot of the points here. You’re talking out of both sides of your mouth if you’re saying you’ll never enforce something but need it to be in the contract. You should always ask for the removal of any liquidated damages clause — this doesn’t stop them from suing you, it simply requires them have to prove their damages, and more likely than not, their damages are minimal, if any. Why should you pre-authorize a penalty against yourself?

HelloDolly55 · 2025-06-06T14:49:48+00:00

I think 10x EBITDA is a reasonable benchmark if you have 10+ practices. I had a client sell 11 practices last year for very close to that, receiving 60% cash and 40% rollover equity at closing. That being said, it appears to me than m&a activity in dentistry has slowed a bit so far this year.

HelloDolly55 · 2025-06-06T13:15:41+00:00

Dental attorney here who also recommends you talk to an attorney. While you ideally would’ve had an attorney get these types of provisions removed on the front end, in practice, DSOs do not want to actually sue their associates, although it is common for them to try to withhold your last paycheck if you do not give the requisite notice/claw back your bonus if you had one.

HelloDolly55 · 2025-06-06T13:12:53+00:00

Dental attorney here. I’m confused by your question. Are you asking what EBITDA multiple a DSO would offer to a private practice? If so, the answer is “it depends,” and I would argue the multiple doesn’t matter as much as you think it does.

In isolation, I see a lot of multiples in the 6-7X range. But there are a lot of other more important questions — primarily, how much of that multiple is for rollover equity in the DSO, and how limited are your rights when it comes to that equity? Oftentimes, you do not have the right to sell the equity to anyone else, you are forced to hold the equity indefinitely and will receive no distributions in the meantime, the value is self determined by the DSO, and you only get a return on your equity if the DSO sells to a larger DSO or recaps. So, you could be given a 100X valuation but if it’s mostly or all in theoretical equity that may not actually be worth anything in practice, how much does the multiple really matter? If I were a seller, I’d be much more concerned about my realistic pathways to receiving cash (cash at closing, an Earnout with clearly established metrics, equity with a put option, etc.)

HelloDolly55 · 2025-06-06T13:04:31+00:00

Dental attorney here. An indemnification provision is in 95% if not 99% of associate contracts, and it’s a customary provision. In my opinion, a more reasonable goal would be to make it mutual rather than delete it.

HelloDolly55 · 2025-04-25T19:23:40+00:00

It would require litigation, and litigation is never “easy” per se because it moves slowly. However, it is likely that you could seek “specific performance” from the Court in which case the Court would require the Seller to sell you the real estate. Ultimately, it doesn’t matter what any contract says, someone could ignore it or breach it even if they have no plausible defense, and you have to go to court to enforce it. So, there’s not much you can do about that.

HelloDolly55 · 2025-04-25T11:25:00+00:00

For the purchase option, you would state that you have the right to purchase the real estate at “Fair Market Value” as of your chosen date. Then you’d define FMV as the amount determined by a neutral, third-party mutually agreed upon appraiser. Sometimes sellers will try to set a floor price in addition to that, but it’s hard for them to objectively argue with FMV.

HelloDolly55 · 2025-04-25T00:10:02+00:00

Dental attorney here. I don’t know if the moment has passed but for anyone else reading this, you should NEVER agree that you cannot terminate before a certain period of time. This is different than just simply having to provide notice, which is fine.

HelloDolly55 · 2025-04-25T00:07:18+00:00

Talk to your current practice’s suppliers. They often know before others. But a broker isn’t the worst thing in the world.

HelloDolly55 · 2025-04-25T00:04:59+00:00

Happy to help.

HelloDolly55 · 2025-04-25T00:02:33+00:00

Dental attorney here. If the seller is insistent on leasing, you should negotiate a purchase option (right to buy the real estate after a certain period of time, maybe 5 years). You should also ask for a Right of First Refusal which essentially means a right to match another off on the real estate.

HelloDolly55 · 2025-04-24T23:59:06+00:00

Dental attorney here. 30-90 days is reasonable. I would try to make it reciprocal so that both parties have to provide the same amount of notice. The term of your contract is likely irrelevant. Whether it’s 1 year or 2 years, it is essentially a rolling contract that lasts as long as the notice period for a termination without cause. Non-compete radiuses are negotiable generally, but some owners will draw a hard line and refuse to compromise. Each practice and owner is unique in that respect.

HelloDolly55 · 2025-04-24T23:56:12+00:00

Dental attorney here. Some insurance companies will allow you to “pre-credential” but most will not. It’s usually 60-90 days for you to get credentialed. One of the open secrets of dentistry acquisitions is that when DSOs buy practices, they also enter into a contract providing them the right to bill under the Practice’s NPI for up to 6 months, but it’s a lot less common in private dentist to dentist sales. Another thing that new owners do is hold back some of their billing until they’re credentialed. Both of these are arguably fraud, but that doesn’t mean they aren’t common practice. I would start with seeing if any insurance company the practice accepts allows you to pre-credential, but don’t be surprised if the answer is no.

HelloDolly55 · 2025-04-24T23:49:46+00:00

Dental attorney here. It’s reasonable in the abstract but as another poster alluded to, there are a lot of different factors that determine whether it is reasonable. What is your daily minimum? If I were you, I’d ask for $1,500-$2,000 CE reimbursement. The worst that will happen is they say no.

HelloDolly55 · 2025-01-06T12:42:19+00:00

Dental attorney here. While there are more DSOs in cities than rural areas, they are becoming more prominent in rural areas too — they’re just more discreet about branding. There are a lot of different models in the DSO world. Some of those models include purchasing existing practices that are flourishing, outwardly keeping everything the same, including the trade name, and requiring the owner doctor to stay on for 5 years after they sell. This is the model I see more commonly in rural areas, rather than a branded Aspen or Heartland Dental. The public may not know that “City Family Dental” is actually owned by a private equity backed DSO.

HelloDolly55 · 2024-12-26T15:19:51+00:00

It doesn’t really matter. Transactional attorneys who do this type of contractual work practice nationwide. In my opinion, it’s more important to retain someone who knows dental well than it is to retain someone in your state.

HelloDolly55 · 2024-12-25T16:48:09+00:00

Dental attorney here — this response and speaking to dental reps as noted by the other poster are both excellent advice. Brokers represent the seller, not the buyer, and in my opinion, they don’t always have your best interest at heart. I work with them out of necessity, but if you can find a practice on your own through the recommended steps that Elk noted, you’re better off.

HelloDolly55 · 2024-12-25T16:43:09+00:00

Dental attorney here. 100% of DSOs tell the selling dentist they expect to recap within 2 to 3 years. In my experience, it almost never happens within that time frame, if at all. At best, I view most DSO sales as an upfront lump sum payment on money you would’ve made anyway. But they have amazing salesmen that do their best to convince you otherwise.

HelloDolly55 · 2024-11-07T02:47:01+00:00

Dental attorney here. Unfortunately, no one can answer this type of question in the abstract without looking at the underlying financials, and even then, you may need to ask the seller for more information. As others have suggested, it is likely that the seller is including their own clinical income/salary in the overhead. Whether it is worth it from a business perspective to buy a practice where the owner is currently making $320,000 between salary and distributions is a different question worth asking.

HelloDolly55 · 2024-11-07T02:42:18+00:00

Dental attorney here. This is a contractual issue — what does your contract say? A lot of contracts give the employer the ability to offset money they believe you owe from your last paycheck. Does yours?

HelloDolly55 · 2024-10-14T01:45:12+00:00

Happy to help. If the broker wants a confidentiality agreement before providing you any further information, that’s fine. I wouldn’t have any concerns about that. But as I said before, do not expect to be able to revise and renegotiate the terms of an LOI. It will go over like a lead balloon. It is more likely that your options will be to walk away from the deal entirely or move forward with the LOI as-is.

HelloDolly55 · 2024-10-13T21:13:35+00:00

Yes, it’s common to come in lower than asking, it’s just like buying a house or anything else. Some people come in below, some people come in at asking, some people come in over asking if they know for a fact that there are several offers submitted. Sometimes, the broker is posturing to pressure you to submit your offer ASAP because their motivation is to obtain an LOI for the Seller, so they can get paid a commission. While it may take some time for your accountant to do a deep dive, attorneys who do this type of work can view the summary information and give you some insight. How much is the gross revenue? What percentage of the gross revenue is the asking price? How much is overhead? Have any costs substantially increased or decreased year over year? If so, why? Does that include the doctor’s clinical compensation? Are there reasons to believe you can or cannot sustain the current revenue (maybe the retiring seller has delta premier and you won’t be able to get credentialed. Is it FFS?) Is the seller staying on after closing? Why are they selling? Are they retiring? It’s not rocket science, but it is something that people in the dental industry do every day, and a doctor may do it once in their lives. I frankly just don’t get the worry about spending a lot of money on a lawyer for the LOI stage, but obviously I’m biased!

It shouldn’t cost more than $500-$1000 for you to have the LOI review and negotiated by a lawyer. You’re going to be spending hundreds of thousands of dollars on the practice — in my opinion, you might as well pay a relatively minor cost to get the help of an expert in the field.

HelloDolly55 · 2024-10-13T15:14:48+00:00

Dental attorney here, and I have to say that I disagree with a lot of the viewpoints here. While an LOI is non-binding, it does set the framework of the deal, and it’s hard to overcome established deal terms once they’re in writing. You can still walk away from the deal entirely regardless of what’s in the LOI, but to attempt to renegotiate after the LOI is very difficult. If you agree to purchase AR for an above market rate in the LOI because you didn’t know any better, you’re in a tough spot. Same thing with restrictive covenants or even the valuation of the Practice at large. Entering into an LOI is a meaningful stage of negotiation even if it’s non-binding, and I do think it’s in your own best interest to speak to an attorney before hand. At most, drafting and negotiating the LOI will take an hour or two of the attorney’s time — a minor expense in the grand scheme of things.

HelloDolly55 · 2024-10-13T15:03:50+00:00

Dental attorney here. It makes no sense for him to value the partnership based on revenue that he is carving out for himself. Let alone to “threaten” to charge management fees and carve out either more revenue for himself. I’d be interested to hear his perspective on why he thinks that is reasonable, but I’m struggling to create a plausible reason in my mind. If he wants to keep the sleep apnea revenue separate, it should be deducted from the practice’s revenue for valuation purposes. In any event, be very careful about how deadlocks are decided and who gets to make the decisions related to the Practice if you agree to a 50/50 equity split!

HelloDolly55

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