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The Contract All Dentists Need to Have

By February 2, 2021February 12th, 2021Corporate, Practice Management

Unfortunately, the past year has shown us firsthand the negative impacts of having to shut down your dental practice completely. But there is an even greater risk to your business if your office is the only one closed (due to planned or unplanned absences of the principal dentist). What can you do to prevent your practice from suffering the undue risk of lost patients and revenue? The answer is a locum agreement!

The Risks of Closing Your Practice

2020 forced us all to look at our operations and make adjustments we never planned on. For many dentists, this included closing their practice completely for an undetermined period. And while we know the stress and complications it brought to the practice owners, one possible silver-lining was that almost everyone was in the same position. If you were in an area that was ordered to close due to the pandemic, odds were pretty good that your local competitors were closed as well.

But what if that wasn’t the case? What if you had to step away from the practice for reasons that didn’t affect your competitors? If your patients had other options nearby, would they be willing to reschedule appointments and wait until you resumed regular business?

It is inevitable for most of us that there will be times when we need to step away from work for some time. This time away from your dental practice could be two weeks or many years, depending on the reason for the absence. Reasons can vary from taking a family vacation, maternity or paternity leave, taking care of yourself or a loved one dealing with health issues, and much more. Sometimes, you can plan this leave in advance and know precisely how long you will be away from your practice. Other times, the situation will be unexpected and call for departure for an indefinite length of time.

But what happens to your business while you are away from the practice? Do you put a sign on the door and change the voicemail to advise patients that the office will be closed? Do you try to reschedule weeks or months worth of appointments? And what about your team? Do you need to temporarily lay-off your staff until you can open again? While many of these questions came up during the pandemic’s forced-closures, there is a greater risk to your business if your practice is the only one closed. The same strategies may not work if yours is the only practice closing.

So, what can you do? Prepare yourself for unforeseen circumstances: set up a locum agreement in advance!

What Is A Locum Agreement?

A locum agreement is a contract between the dentist who will be away from their dental practice (let’s call this dentist the “principal”) and a dentist or dentists who will temporarily be providing dental services to the principal’s patients (let’s call them the “locum “). The locum dentist is a substitute dentist that can step into your shoes and help run your practice while you’re away.

The locum agreement is the rule book between the owner dentist and the locum dentist. It documents all aspects of the arrangement, such as:

  • The Nature Of The Relationship
  • Remuneration For The Locum Dentist
  • Responsibilities Of The Locum Dentist
  • Confidentiality
  • Non-Solicitation
  • Non-Competition
  • Ownership Of Dental Records And
  • Termination Of The Locum Agreement

Why Would I Want A Locum Agreement?

As we have seen, any interruption to your operations will have a negative effect on many areas of your business. Establishing a locum agreement to prevent having to close your office minimizes the impact of your absence. Having this contract offers many advantages.

Uninterrupted Operations

Through the provision of dental services by the locum dentist, you ensure that the business side of the practice will continue to run smoothly. Without having to stop patient care, billings will remain steady, and thus the ongoing expenses will be covered (e.g. rent, wages, suppliers).

Customer Goodwill

The value in the goodwill that a dental practice builds and accrues over time is often underrated. This is the reputation and trust that you have developed with the patients and within the community. Maintaining the same quality of care and not having to pause service delivery allows for the maintenance and preservation of that goodwill.

Although you may not see a tangible dollar amount attached to goodwill in your daily operations, this goodwill significantly increases the practice’s sale price when the time comes to sell the dental practice.

Reduced Staff Turnover

Trying to maintain a great team while closing your practice can be very difficult, especially if the length of time is unknown. Having a plan that keeps the office running even in your absence offers your team peace of mind. It gives your employees the stability they need to feel secure in their jobs and continue to deliver the quality of care your patients expect.

When Should I Set Up A Locum Agreement?

When it comes to the business side of dentistry, planning is essential. As much as circumstances allow, your locum agreement should be negotiated and finalized well in advance of your leave from the practice. You could even set up a locum agreement when you open your new practice. Having this contract in place before you need to use it will benefit you and your practice in many ways.

Piece of mind

Knowing that you have prepared for the possibility of being suddenly called away from your practice will give you peace of mind. You will be more at ease knowing that things will be taken care of. It will also alleviate some of the stress of such a situation by taking what could be a time-consuming task off your list of things to worry about.

Comprehensiveness of the agreement

By describing the provisions of a locum agreement in advance, you can ensure that you are in the right frame of mind to capture all the necessary information the locum dentist will need to properly run the practice in your absence. When rushing to get things in place because you need to leave, you will have a lot on your mind, and the chances of forgetting to explain or document something is much higher.

Mutually agreeable terms

If you have already chosen the specific person who will act as the locum dentist for your practice, an additional advantage of a pre-planned locum agreement is the ability to negotiate mutually agreeable terms while both parties are on equal ground. Otherwise, as the person needing coverage quickly, you may be in a desperate and vulnerable negotiating position. As with any contractual relationship, a properly thought-out contact can reduce or eliminate risk and provide for foreseeable eventualities should there be an unfortunate breakdown in the relationship between the principal and locum dentists.

However, establishing your locum agreement in advance means you or your lawyer should review it regularly. It is best practice to review the agreement annually as circumstances could change significantly over time.

The Bottom Line

Closing your dental practice for any amount of time is risky. Although it is widely accepted that dental patients are some of the most loyal ‘customers’, it is hard to maintain that loyalty when there is no dentist or dental practice to be loyal to. And once a patient has left your practice in favour of another, it can be challenging to get them to return. Setting up a locum agreement in advance, whether you have a specific locum dentist in mind or not, puts a plan in place. It lets you avoid closing your office and helps to maintain the health of both your patients and your business.

If you have questions about a locum agreement or any type of contract, please give us a call. We not only have expertise in selling dental practices, but we also represent dentists in all aspects of managing your business. We are happy to help you with employment contracts, lease agreements, corporate minute books and more. The DMC team is dedicated to helping dentists succeed and improve their business and their lives by saving them time and money.  Send us an email any time.

The Content of this post is provided for informational purposes only. It is not intended to be legal, financial, tax, or other professional advice of any kind. You are advised to contact DMC (or other counsel) to seek specific legal advice concerning your individual situation.