Money Minutes for Doctors #10 - Contracts

Welcome to the final installment of Money Minutes for Doctors for 2018. In our final monthly podcast of the year we talk with Ms. Katherine Vessenes, JD, CFP®, RFC, Founder and President of MD Financial Advisors, about a topic that is undoubtedly foreign to most physicians upon graduating medical school: the employment contract. Negotiating your first employment contract can be one of the most intimidating pre-employment activities prior to donning the white coat. Having an understanding of your employer’s expectations and what is contained within the four corners of the paper on which you sign will go a long way to relieving the uncertainty and concerns related to a document which will play a primary role in your financial life. Enjoy and Happy New Year!!


About Ms. Vessenes:

Ms. Vessenes works with over 300 physicians and dentists from Hawaii to Cape Cod. Her firm uses a team of experts to provide comprehensive financial planning to help doctors build their wealth and protect their wealth while reducing taxes now and in the future. Katherine is a longtime advocate for ethics in the financial services industry; and has written three books on the subject of investment strategies. She has received many honors and awards including: numerous tributes from Medical Economics as a top advisor for doctors, multiple 5-Star Advisor Awards, honored as a Top Woman in Finance, in addition to being selected to be on the CFP® Board of Ethics. Katherine can be reached at: or 952-388-6317. Her website:

Quick Summary:

Negoiating a Contract

by Katherine Vessenes, JD, CFP® and RFC   

  • There has never been a contract that was not negotiable and improved in some way. 

  • If you sign without negotiating you are leaving benefits (money, vacation time etc.) on the table

  • Know what you are worth! You have to do your homework:

    • Go online or and search for salary range of physicians in your desired area. 

    • Realize salaries are lower on the coasts than in the center of the country 

  • Medicine is being treated more like a business so contracts often include in the right to reduce your salary which is often tied to your productivity, referral base, network area etc. 

    • You should ask your employer about their marketing plan so you can know patient recruitment and importantly if the employer is going to be asking you to do any of your own marketing. 

  • Know how your salary is calculated - Is it based on receivables, RVUs, etc.? Realize that your salary may not be fixed and guaranteed.

    • Ask “What are doctor’s in my position making in year 2, 5, etc of the contract?” You could always ask for a range

    • You have more legal rights to salary than for bonus wages in the event of an employee/employer dispute

  • Watch out for how disputes are resolved b/w employer and employee. Recommend mediation before arbitration and law suits as mediation much less emotionally and financially taxing. 

  • Benefits:when salary and working conditions are similar, benefits, particularly pension plans, can vary wildly from employer to employer and may be the deciding factor in job choice.

    •  401-ks and 403-bs, both defined contribution plans, are the most common employer sponsored pension plans. The big issue is to ask about the “match”.  

    • On the low end, the match might be 2% per year with a five-year vesting schedule. 

    • The highest we have seen is 12% per year. 

  • Vacation time. This has been going down in the last few years. However a minimum of four weeks for physicians is the norm.  Have seen up to 12 weeks /year in some specialties  

    • CME: typically this is one week off per year, and a budget of $3,500 to $5,000. Definitely negotiate for the higher amount, as $3,500 is probably not enough to cover a single conference including conference registration, travel and hotel etc. 

    • New changes to the 2018 tax rules do not allow employees to deduct any additional educational expenses in excess of CME 

  • Relocation expenses: A range from no relocation expenses to unlimited amounts depending on how heavily the physician is desired. 

    • New changes to tax laws in 2018 now mandate physicians have to pay taxes on relocation expenses provided to them by their employer  whereas previously this was tax deductible.  You should be asking your employeer and increase the amount of money provided for relocation to allow for necessary tax payments

  • Covenants not to Compete.These are quite common in contracts as loyal patients will tend to follow their doctors to a new employer when geography allows for such. This can be an important issue to resolve up front, since many of our clients find their first job is not to their satisfaction and end up leaving. 

Practice tip: This is an area where you should get advice from an attorney. If possible, see if your future employer will eliminate this clause from your contract. If that is not possible, try to get the time limit to less than a year, and maybe 5 miles from your existing location.

There is much more to come so be sure to listen to session #2 next month & good luck with the job search!