The pandemic has been a tough time for everyone, especially for the medical and dental industry. In providing the latest insight on the dental industry, Carolina Dental Advisors will give you a peek at the current legal aspects of dental practices during the COVID-19 pandemic.
In this post, Brad McKeiver, a CPA from Aprio, and Nathan Hull from Hull & Chandler discuss how dentists can be aware of the possible pitfalls in legal agreements, contracts, and LOIs, and achieve smooth practice transitions amid the pandemic.
Tips during practice transitions
Nathan Hull is the president and founding partner of Hull & Chandler which handles business law focusing on the medical and dental industry. They represent dentists during a practice transition and have extensive experience in the most common legal scenarios during a sale.
Here are some tips on the legal aspect of a practice transition:
Buying a dental practice
Buying a dental practice is more than just having an agreement. It is also about doing your due diligence in getting what you expect from the sale. These include looking into the following:
- Employee retention: Determine if the key employees will stay during the transition by checking the bounds of their contract.
- Issues with non-transferable employee contracts: There are some instances where contracts derived from the Internet contain non-transferrable clauses that can be an issue during the transition.
Selling a dental practice
Aside from getting the value you want from the sale, you must also check several considerations. These include:
- Issues with non-compete agreements: A non-compete agreement can become a big issue when dentists want to continue practicing dentistry after selling their dental practice.
- Indecision: Whenever they see a sale opportunity, some dentists forget that they are making enough money working in their practices. So, some of them take time to re-evaluate their financial needs and decide if selling their dental practice is the best decision at the moment.
If dentists decide to sell their practice, it is best to hire an attorney to properly sort out the legal agreements for a smooth practice transition.
Understanding non-compete agreements
Non-competes have become a prevalent trend during COVID. Recently, many medical and dental professionals have asked about the bounds of their non-compete agreement or how they can hire a professional with a non-compete without any issues.
Non-compete agreements have technical attributes that must be explored to make them work for both parties. Each state has a way of dealing with non-competes. In North Carolina, most legal and dental professionals believe that if the language of the non-compete agreement is wrong, it’s not going to stand up.
So, dentists must make careful considerations on non-competes which include:
- The inclusion in a non-compete agreement can put dentists on a limited track after the sale. So, they must evaluate the restrictions in a non-compete carefully before signing them.
- Polishing a non-compete agreement is more than just listing down what the other party can’t do after the sale. Dentists must consult an attorney to do it properly.
- If you are a dentist who wants to hire an associate with a non-compete, an attorney can evaluate the agreement and see if it has a chance to be unenforceable.
- An attorney can also help dentists who set the restrictions in making sure that the non-compete agreement stands.
- Before signing a non-compete agreement, dentists must make sure that the restrictions are something that they can live with to avoid being stuck in litigation.
- The goals in a non-compete agreement are to:
- Avoid future litigation
- Find common ground that you can live with
- Avoid signing anything that can potentially restrict your plans in the future.
COVID-19 as a stream of potential opportunities for dentists
Most dentists have been reassessing their dental practices, whether they want to stay or move on from their dental practice and sell it. Some are motivated to make a deal today due to the possible tax code changes in the future. Interest rates are also low, which is also a good opportunity for dentists as long as they find a good deal.
Get more insights about your dental practice with Carolina Dental Advisors
Achieve a smooth practice transition with the best legal advisor for your dental practice. Contact us today and learn how your practice can stay on top of the latest trends in the dental industry by checking our blogs.