Never Hire an Associate Before You’ve Done These 4 Things

Adding an associate can be one of the best decisions you make for your practice, or one of the worst. The difference usually comes down to preparation. Let’s assume you have already determined that you actually need an associate. Before you start looking, there are a few things you need to have worked out so you are fully prepared and not making major decisions on the fly during an interview.

Here is what to handle first.

Table of Contents

• 1. Decide What Type of Associate You Need
• 2. Put an Associate Agreement in Place
• 3. Define the Skills the Role Requires
• 4. Nail Down Compensation Before They Walk In
• Get the Whole Package Ready First

1. Decide What Type of Associate You Need

Before anything else, think this through carefully. What situation are you actually trying to create? Do you need a doctor who can handle all kinds of procedures? Are you looking for more of a mentorship arrangement? What skill level do you need? Is this someone you might eventually bring on as a partner?

A lot of that depends on how you want to integrate the associate into your practice. There are several common configurations, and the one you choose determines the kind of doctor you should be looking for.

The Traditional Associate Relationship

You have a more experienced doctor with stronger clinical skills who brings in a younger doctor and acts as a mentor. The younger doctor takes on the procedures the owner no longer wants to do. They might see the kids, cover emergencies, handle the fillings, and generally do the work that frees the owner up to focus on more involved, higher-end clinical care.

The Production Doctor Setup

This is a configuration many MGE clients have used successfully. The owner doctor starts moving away from chairside and focuses primarily on diagnosis, treatment planning, and treatment presentation. In other words, the owner focuses on diagnosis and sales, and the associate does the work the owner is selling.

The owner does not have to give up chairside entirely. You might reserve certain procedures for yourself, such as all-on-four cases or implant placement. The point is that the bulk of production is done by the associate while you sell the treatment.

A couple of important notes on this setup:

• It only works in a high-volume practice. You need a very busy hygiene program and strong new patient flow. Without that, it falls apart.
• Consider the time involved. Selling a treatment plan of, say, four crowns and two implants might take you 20 to 30 minutes to explain, get the patient to agree, and work out financial arrangements with your treatment coordinator. Actually doing that work, placing the implants, prepping and delivering the crowns, takes far longer. That means one owner acting as the sales doctor can potentially keep more than one production doctor busy.

Over time, this setup can move you away from chairside entirely. You can eventually hand off some of the selling too and step into the role of CEO of your practice.

The Satellite Office Setup

Dentistry is going through a generational shift, and it looks like a large number of practices will come up for sale over the next five to ten years. As those practices become available, entrepreneurial doctors are looking at adding locations. If you add an additional location, you are going to need associates to staff it. A satellite associate generally needs a good degree of autonomy, since you will not be there to treat, plan, and present cases yourself.

The Semi-Specialty Associate

This is the one to be careful with. Bringing in an actual specialist a day or two a week can be great. If you have a lot of endo and do not want to refer it out, bring in an endodontist. The same goes for an oral surgeon or a periodontist. A multidisciplinary practice can work well. Orthodontics is the exception, mainly because of the volume involved.

Where this goes wrong is when you bring in a general dentist to do procedures you could do but simply choose not to. Say you do not place or restore implants and you refer them all out, then you hire a GP who places implants to come do them for you. It can work, but it can also go very wrong. The common failure looks like this: the office decides it can now offer implants, shifts most of its marketing budget

toward implants, and watches production go up while profitability goes down. Some practices end up making less profit than they did when they were simply referring the work out to a specialist.

The bottom line: a true multidisciplinary practice under the heading of a specialist is fine. Bringing someone in to do work you could do but do not want to is a harder thing to make profitable.

Decide which configuration fits your situation before you go looking, because it shapes every other decision you make.

RELATED VIDEO: 🎥 6 Signs Your Practice Is Ready for an Associate

2. Put an Associate Agreement in Place

Once you know the type of relationship you want, you need a solid associate agreement. This protects both parties, not just you. It helps you avoid situations where there is no non-compete or where a departing associate solicits your staff to open their own practice.

You may have heard that non-competes are unenforceable. That is a legal question, but the practical view is simple: it is better to have an agreement that could potentially be enforced than to have nothing at all.

Beyond that, a good agreement makes expectations clear. It spells out what the associate is expected to do, how they will be compensated, and what you are responsible for. It gives the relationship something to orient around.

MGE offers a free sample associate agreement you can download for reference. It runs about 15 pages. It is not ready to use as-is, and it should not be treated as legal-ready. Hand it to an attorney to review, edit, or rewrite. Think of it as inspiration and a starting point rather than a finished contract. Have your agreement ready before you bring anyone on.

🎧RELATED PODCAST: Should You Use an Associate Agreement?

3. Define the Skills the Role Requires

Now decide what this person absolutely has to be able to do walking in the door. This depends heavily on the configuration you chose.

• Traditional relationship: Since you will act as a mentor, the associate could be right out of school, a year or two out, or fresh out of residency. Decide the specifics. Do they need to do molar endo, or not? Figure that out before you interview.
• Production doctor: This person needs to operate at roughly the same clinical level you do and at a comparable speed, which means more experience. Your pool of candidates narrows accordingly.
• Satellite office: This is usually similar to the production doctor. The associate needs enough autonomy to treat, plan, and present cases on their own, because you will be at the main office.

Separate your list into deal breakers and nice-to-haves. Identify what is non-negotiable, then make sure any candidate checks all of those boxes before you consider hiring.

4. Nail Down Compensation Before They Walk In

Have your compensation plan figured out ahead of time. This is where knowing your overhead matters, so run the numbers. Work out how the math plays out if you produce a certain amount and the associate produces a certain amount.

• Traditional or satellite relationships: Pay no more than 30 percent. You might use a per diem or a guaranteed base, but that base should be weighted against the 30 percent. For example, if you guarantee a base of $12,000 per month, or $144,000 per year, look at what 30 percent would require in production before you layer on any additional incentives. Roughly speaking, $144,000 is about 30 percent of $450,000 in production. Do not add incentives until they exceed that threshold, because paying them more for producing less effectively pushes you past 30 percent.
• Production doctor: Pay between 22.5 and 25 percent. This surprises people, and you will hear objections. A candidate may tell you the DSO down the street is offering 35 percent plus a signing bonus. Ask what they would actually be doing there. At that DSO they might be expected to produce $40,000 to $50,000 a month. As your production doctor, where you sell all the treatment, they come in, glove up, and do high-end dentistry all day, producing $100,000 to $150,000 a month. They end up making more money, doing higher-end work, with far more job satisfaction. It works, and clients do it successfully all the time.

Whatever mix of per diem, salary, and incentive you use, the total should not exceed 30 percent. If they produce more, you can always pay more, but set a baseline so it is clear that below a certain point, this is all they receive.

Get the Whole Package Ready First

Finding the right associate, onboarding, and the rest come later. The point here is to walk in fully prepared. You do not want to be deciding any of this during the interview. When a candidate asks how much you pay, the answer should not be “I don’t know, how much are you looking for?”

Have the entire package ready before anyone walks through the door, including your associate agreement. Get these four things handled first, and you set yourself up to make one of the best decisions for your practice rather than one of the worst.

For any additional questions and information, please call 800-640-1140 or go to MGEonline.com