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Before You Sign That Associate Contract: What A Healthcare Attorney Checks First

The first real contract of your career shows up with a reassurance attached: “Our lawyer already looked at it. You can get your own if you want — but you don’t have to.”

Dan Schulte has spent more than thirty years watching what happens to dentists who take that offer. He’s a transactional attorney at Kerr Russell, the Detroit firm celebrating its 150th year, where he leads the firm’s longstanding representation of the Michigan Dental Association — along with the state medical and osteopathic societies. He’s also a former CPA, which shows in how he reads a deal. We had him on the Dentelligentsia podcast, and his opening move on that reassuring sentence was surgical: yes, a lawyer looked at it. The employer’s lawyer. Wrote it, in fact — for the employer’s benefit. The fact that three other associates signed it proves nothing except that three people didn’t get advice.

Here’s what he actually checks, in the order the damage usually happens.

The compensation is the least of your problems

Every associate asks about the pay first — is this competitive, should I get more. Schulte’s view: that’s the easiest thing to verify (you talk to classmates; you know the range) and the least dangerous thing in the document.

The dangerous parts are term and termination, and they hide in plain sight. The contract says it runs three years, and the new associate believes they have a three-year deal. “Nobody has a three-year contract,” Schulte said. Coaches and quarterbacks have guaranteed terms. Dentists have the termination section — and every employment agreement can be terminated without cause on notice. If that notice period is 30 days, then whatever the term section says, “what you have is a 30-day contract.” Read it that way and negotiate it that way.

Then check that for-cause termination cuts both directions. The employer’s list should be short and serious — lost license, revoked DEA registration, theft, arson — not a catalog of vague sins. And you need your own for-cause rights: if you don’t get paid what you’re owed, when it’s owed, you shouldn’t have to keep working through a 30-day notice period to leave. That’s not an exotic ask. It’s symmetry.

The non-compete: reasonable, or a window into the soul

The FTC’s attempted nationwide ban is on hold; in Michigan, covenants not to compete remain enforceable and will be for the foreseeable future. So assume yours is real, and test it against what the law actually permits: no broader than needed to protect the employer’s legitimate business interest.

Schulte’s translation is beautifully concrete: plot the practice’s patients on a map. If a five-mile radius captures the pins, five miles is defensible. Ten or twenty miles — in a suburban market where you’d pass twenty dental offices driving that far — protects nothing legitimate. Two years is the outer limit anyone should request. And watch for liquidated-damages clauses that charge you $50,000 per patient seen inside the restricted area, even for a $150 cleaning: unreasonable on their face.

Then ask for the clause almost no first draft contains: a short-term termination exception. If the relationship ends inside the first year — especially if the employer ends it without cause — you’ve barely met the patients and pose no competitive threat, and the covenant shouldn’t apply at all. Reasonable employers agree to this when asked. Which is the deeper point of the whole negotiation, in Schulte’s words: “If you ask for unreasonable things to be taken out and they refuse, that’s a window into the soul of your potential employer. If they act like this while they’re courting you, what will they act like once you’ve signed and have no leverage at all?”

The lease is a loan

When the conversation turned to practice space, Schulte led with the misconception that costs tenants the most: people assume a lease works like other contracts — some way out if circumstances change. “A 10-year lease is a promise to pay rent and expenses for 10 years. It’s more like a loan transaction.” Business failing, circumstances changed, doesn’t matter: the obligation runs to the end of the term.

Which makes the assignment and subletting language your only exit, and worth more attention than almost anything else in the document. You want the right to hand the lease to a similar-use tenant with reasonable financials — consent required, sure, but not unreasonably withheld. Know the difference between the two mechanisms: an assignment can take you off the hook; a sublease keeps you liable if the new dentist stops paying — which, in a retirement sale, quietly makes the retiring dentist a guarantor of their buyer.

His checklist for the rest of the lease runs through the questions nobody asks until the ceiling drips. Maintenance, repair, and replacement: who owns the roof, the HVAC, the parking lot, the capital expenditures — obligations often scattered across the document with exceptions that supersede each other. Use provisions and exclusives: be the only dentist in the shopping center, and think about who your co-tenants can be — the incompatible neighbor (his current-era example: the marijuana dispensary sharing your parking lot) is a diligence item, and you get one chance to negotiate protections before signing. Parking and signage: what the lease grants, and separately what zoning allows — two different questions, both capable of ruining you. And the personal guarantee: reasonable for a first-time owner with no business track record; unreasonable for the 36-year practice with flawless payment history that Schulte represented recently — he struck both the guarantee and the security deposit from that lease and told the landlord, in effect, you’re not dealing with a college student. In between, negotiate a burn-off: after five years without a default, the guarantee ends.

The team, at the beginning — not the eleventh hour

Asked for the single biggest mistake dentists make in transactions, Schulte didn’t pick a clause. He picked a sequence. The deal gets found, the documents get drafted, everyone falls in love with the closing date — and only then does the buyer’s attorney, accountant, and insurance advisor get a look. “What about the purchase price allocation? The indemnity? Are these contracts assignable? Was this negotiated?” Asked at the eleventh hour, every one of those questions reads as an obstacle. Asked at the beginning, they’re just the work.

His sharper warning — delivered, he noted, with two real estate brokers on the call — is about brokers who hand clients their own purchase agreements with the suggestion that a lawyer is optional. We’ll co-sign the warning from inside the profession: a broker supplying legal documents is practicing law without a license, and a client accepting them is saving hundreds now to spend tens of thousands later. Our job is the market and the business terms. The attorney’s job is making them enforceable. The due-diligence team on a space runs wider still: architect, electrician, plumber — honest third-party answers about the HVAC and the plumbing before the tenant improvement negotiation, not after.

What thirty years of doing it right looks like

We asked Schulte for the best compliment he’s received, and his answer is the quiet thesis of this whole episode: the client who calls back. “There’s a big difference between the hired gun and the trusted advisor.”

Then he told us about a couple — both dentists — whose employment agreements he reviewed fresh out of school more than twenty years ago. Years later he handled their purchase of the practice from that same employer. This year, he closed the sale of that practice and their retirement. The complete life cycle of a career, one advisor, start to finish. Things went wrong along the way, he added, because things always do. That’s rather the point of having the team in place before you need it.

His closing advice for the young dentist was the same as his opening: assemble your team, and actually use it — from the first contract, not the last. The full conversation with Dan Schulte is on the Dentelligentsia podcast. And for the seat at that table where the market knowledge sits — the space, the terms, the landlord’s reputation — talk to us.