The Associate Dilemma, Part II

Associateships as a Transition Plan

Most associateships never materialize into a practice sale, and often end up involving lawyers to untangle ill-advised and poorly drawn covenants… Why?

Poor planning.

There is one scenario that we hear about over and over again… When a doctor brings on an associate, his practice has a value. Over time, the two doctors should theoretically increase that value. So when it comes time for the associate to buy-in to the practice, how do the doctors determine the value of the Goodwill that the associate contributed? Due to poor planning, they usually don’t, and the sale never comes to fruition.

This can be avoided, of course, with timely planing. The practice must be appraised or valued before the associate joins the practice, and then again just before the buy-out occurs. Furthermore, appropriate attention must be paid to how the associate’s contribution to practice growth will be measured, which should be agreed upon and contractually signed.

Then, they must stick to the plan.

And if the doctors work well together, understand the practice overhead, and stick to a business plan, the transition may satisfy both doctors.


About the Author

  • Founder

    Dr. Bill Adams is the Founder of US Dental Transitions (formerly Southeast Transitions). He practiced general dentistry for 25 years after graduating from Emory in 1969. He founded our company in 1998 to help fellow dentists transition their practices to other dentists who share similar values and philosophies. Over the last 23 years, Dr. Adams has consulted with over 6,000 dentists and transitioned over 600 practices. He is Pankey/Dawson trained, a Fellow in the Academy of General Dentistry (FAGD), and a lifetime member in the Hinman Dental Society.

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