Pros and Cons of Employment at a Corporate Veterinary Office | Corporate Vet Clinic Benefits and Work Problems
What are the pros and cons of a veterinarian working in more of a corporate clinic setting? First, are you working as an employee or 1099 independent contractor?
Corporate Practice or Solo?
When working for a corporation, there are a lot of pros, starting with the benefits that are typically offered such as health insurance, retirement, disability, life insurance, sometimes travel, and cell phones. The list just kind of goes on from there. There are more benefits that are going to be offered to you in a more corporate clinic. Also, the facilities in a corporate setting typically are more standardized. If there’s more than one location that you’re going to be providing services at, normally, they’re standard between the locations. And then also support staff. Normally, you’re fully staffed with the people that you need and the equipment within the facilities.
Pros of a Corporate Vet
So, this is great. In a corporate veterinary work setting, you’ve got benefits, and the facilities in corporate clinics are great. Sometimes the pay can be more in a corporate setting, I would say often, you are typically compensated more. Those are just kind of the pros depending on what you’re looking for. If you’re looking for benefits (which will be provided with any W2 position), you’re looking for things that are more standardized policies, and also with admin, then that’s considered a pro for a corporate clinic. Some cons that you want to kind of think about are you’re normally not able to negotiate quite as much in an employment contract. When you’re initially starting your employment with them, it’s typically offered the same sort of agreement for all the other vets that are similarly situated. Also, you want to think about your compensation.
Cons of Working on a Corporation
That is one thing that you can sometimes negotiate in a corporate veterinary clinic. Some other cons and probably the biggest one, well, I would say there are probably two. One, there are normally a lot of expectations for how many clients you’re going to be seeing in their animals per day, there are quotas, there are maximums, and there are minimums of expectations that you must meet. And if you’re not meeting those, there are consequences to those. That’s something that you want to consider if that’s something that you feel up to. I would say another con is normally the non-compete clauses. They are extensive. There are going to probably be multiple locations, large miles from each location that you’re going to be restricted. Also, be careful if you are working as an independent contractor that the agreement does not contain a non-compete clause.
And then normally, for an extended period, the biggest con of a corporate clinic is those non-compete clauses. Because those can really come back to bite you. Going back to the pros, I would say another pro would probably be just marketing and advertising. They’re marketing and advertising on your behalf. They’re bringing in tons of clients and their pets, so there’s really no worry that you’re going to have that client base there. It’s easy to build up because you have them supporting you in this sort of setting.
Veterinary Clinic Contract and Benefits
How should you negotiate a vet associate contract? There are lots of things to consider when you want to negotiate your contract or what we call an employment agreement.
Leverage in your Practice
The first thing you want to understand is how much leverage you have and what I mean by leverage, I mean, are you just out of your schooling? Do you have any experience? Are you specialized? If you’re specialized and there are very few of you in the vet industry, then you have more leverage. But if you’re just out of school for general veterinary practice, you might have a little less leverage. And then also, if you’ve been practicing and you have a substantial client base and you have lots of years of experience, then you may have more leverage in relation to that.
Base Salary Negotiation
Once you understand how much leverage you have, then you need to understand what you should be asking for. The first thing I always see our clients want to negotiate is their base salary. Base salary or base compensation is just the flat, you’re going to get every month upon continuing your employment. The problem with this is normally how vets are compensated is not only just through their base compensation. You’re also normally compensated through collections. That’s the typical sort of layout of compensation for really any type of veterinarian. Even if you’re specialized, it’s normally base compensation, and then there’s a part of collections. So yes, the base compensation is important, but there are so many other aspects to an employment agreement. Your percentage of collections can be huge. You want to fight probably for a larger percentage of collections over just a base salary because the base salary will never change unless you renegotiate in the future. But if you have a substantial client base and you know that you’re going to be bringing those clients in, you will want a higher percentage of your collections which you can make well over your base salary. It’s something to consider. I know base salary is the big number on an employment agreement, but you also want to think about collection percentage as well, because you can make a lot more money with a higher collection percentage if you know that you are going to be bringing in those clients.
Now, if you are right out of school and you do not have an established client base, and maybe you’re not replacing someone at a vet practice or clinic, they’re just expanding. It’s going to take you a while to build up that client base. Then you, in that situation, might want to fight for a higher base compensation or salary for a year or two, so that you can establish, as I said, that nice client base. Other things that can be more detrimental to you than even the compensation are those restrictive covenants. And what I mean by restrictive covenants are non-compete clauses, and non-solicitation clauses, but specifically the non-compete. Right now, the veterinary industry is booming and practices that are bringing on and employing vets are protecting their interests.
And so, sometimes these non-competes can be unreasonable and can attach to many locations or just many miles from one practice. So, you really want to consider that because if you are establishing a client base, you’re working hard, you’re bringing in clients and then you decide to leave the practice or they decide to terminate their employment with you, you could have a serious problem. You might not be able to practice in the area. You could even have to up and move your family. Non-compete clauses are extremely important if you want to negotiate in your initial employment agreement. And a lot of times, it’s overlooked because it’s something way in the future. And you’re excited about this prospective future employer or you’re right out of school and you really want to start earning money.
And so, that’s what you’re really focused on, but non-competes are those sneaky clauses in employment agreements that can really hurt you in the future. I would say more than anything, a non-compete agreement is something that you should always negotiate. Now, they’re normally mileage from specific locations that you can negotiate. And then also, for a specific period, they can be anywhere from six months to three years. And I would always try to negotiate that amount of time down and then always the miles down. When you’re negotiating how many miles, you also need to consider, whether can you find work outside of that restricted area without having to up and move? And then you also want to know what’s restricted. Sometimes the non-compete clauses specifically for veterinarians may just say that the practice of veterinary medicine, which is very general, and if you’re specialized, I would negotiate that it’s only within your specialty.
So, non-compete clauses want to negotiate those, most important. Non-solicitation clauses just mean you can’t solicit clients or employee coming with you. And sometimes that period can be negotiated down to six months or a year before you can reach out directly to those clients or to those employees. Then you have your sort of ancillary benefits. For your continuing education, typically you’re given an allowance every year, which is anywhere from 2,000 to 4,000 typically within a vet practice. You can negotiate that money because if you don’t, then you must pay for your continuing education to keep your license. So, that’s something I would negotiate as well. And then also any sort of dues, fees, licensing, all those costs really add up.
And we don’t think about that when we’re just looking at the base salary and how much money you’re going to make, but these sorts of costs can be negotiated at the beginning. And then it’s really going to save you a lot of money in the end, and a lot of headaches as well.
Veterinary Practice Contract Checklist
Every veterinary employment contract is unique. However, nearly every veterinary contract for health care professionals should contain several essential terms. If these essential terms are not spelled out in the agreement, disputes can arise when there is a disagreement between the employer and employee as to the details of the specific term. For instance, if the Vet is expecting to work at the practice Monday through Thursday and the employer is expecting the provider to work Monday through Friday, but the specific workdays are absent from the Agreement; who prevails?
Spelling out the details of your job is crucial to avoid conflicts during the term of your employment. Below is a checklist of essential terms that veterinary contracts should contain (and a brief explanation of each term):
- Practice Services Offered: What are the veterinarians’ clinical patient care duties? Are you given time for administrative tasks?
- Patient Care Schedule: What days and hours per week are you expected to provide patient care and have patient contact?
- Locations: Which facilities will you be scheduled to provide care at (outpatient clinic, surgical sites, in-patient services, etc.)?
- Outside Activities: Are you permitted to pursue moonlighting or locum tenens opportunities? Do you need permission from the employer before you accept those medicine related positions?
- Veterinary License: Will the veterinary practice offer reimbursement for your license or assist in license defense for the veterinary board?
- Practice Call Schedule: How often are you on call (after hours office call, hospital call (if applicable)?
- Electronic Medical Records (EMR): What EMR system is used? Will you receive training prior to providing care?
- Base Compensation: What is the annual base salary? What is the pay period frequency? Does the base compensation increase over the term of the Agreement?
- Productivity Compensation: If there is productivity compensation; how is it calculated (wRVU, net collections, patient encounters, etc.)?
- Practice Benefits Summary: Are standard benefits offered: health, vision, dental, life, disability, retirement, etc.?
- Paid Time Off: How much time off is offered? What is the split between vacation, sick days, CME attendance and holidays?
- Continuing Medical Education (CME): What is the annual allowance for CME expenses and how much time off is offered?
- Dues and Fees: Which business expenses are covered (licensing, DEA registration, privileging)?
- Relocation Assistance: Is relocation assistance offered? What are the repayment obligations if the Agreement is terminated prior to the expiration of the initial term?
- Signing Bonus: Is an employee signing bonus offered? When is it paid?
- Professional Liability Insurance: What type of professional liability insurance is offered: claims made, occurrence, self-insurance?
- Tail Insurance: If tail insurance is necessary, who is responsible to pay for it when the Agreement is terminated?
- Term: What is the length of the initial term? Does the Agreement automatically renew after the initial term?
- For Cause Termination: What are the grounds for immediate termination for cause?
- Without Cause Termination: How much notice is required for either party to terminate the Agreement without cause?
- Practice Post Termination Payment Obligations: Will you receive production bonuses after the Agreement is terminated?
- Non-Compete: How long does the non-compete last and what is the prohibited geographic scope?
- Non-Solicitation: How long does it last and does it cover employees, patients, and business associates?
- Notice: How is notice given? Contact via email, US mail, etc.?
- Veterinary Practice Assignment: Can the Agreement be assigned by the employer?
- Alternative Dispute Resolution: If there is a conflict, will mediation or arbitration process be utilized?
Breaking a Corporate Clinic Contract
Can a veterinarian break an employment contract? I think the most important matter is to kind of define what break means. Do you mean, can I terminate the contract, meaning, get out of it if I’ve already signed it and have started? Yes, that’s one way to think of breaking the contract. In my mind, breaking a contract usually means you’ve signed the agreement, but you haven’t started yet. But we’ll kind of look at both of those.
Can you break a Contract?
Let’s talk about the first one first. Can you break a contract? In any employment agreement, there’s going to be language about how to terminate the agreement. And there are generally four ways to terminate an agreement.
4 Ways to Terminate an Agreement
- You can do it if the term expires, then there’s no automatic renewal, so let’s say you have a two-year contract, get through the two years, neither party has renegotiated an extension, the contract ends, it’s terminated.
- Next, by mutual agreement. If either party is like, you know what? This isn’t working out. Let’s move on. The contract can end.
- The third would be for cause termination. If one party is in breach of contract and doesn’t fix the breach, then they will have the option of terminating the contract immediately.
- And then the last way would be without cause termination. And that just means either party can terminate the agreement at any time, for any reason, with a certain amount of notice to the other party. In the veterinary industry, somewhere between 30 to 90 days is kind of a standard amount for without-cause termination. Just because you’re utilizing one of those four ways of terminating a contract doesn’t necessarily mean you’re breaking it.
What is a Veterinary Independent Contractor?
The Internal Revenue Service (IRS) lists veterinarians as one of the professions that often fall under the independent contractor definition. They also mention:
- Public Stenographers
These professions and many others are considered independent contractors in some circumstances. What this means is that they are self-employed and will likely not receive any professional benefits from the organization. They do not work for a specific employer, but they provide their services for pay to whoever happens to need those services at this time. They agree with the entity they go to work for, and they perform the service for a set pay rate.
One doesn’t necessarily think of veterinarians as a job classification that would be ideally set up to work as independent contractors, but they are. Clients have sick and injured pets throughout the world, and it is sometimes more accessible for a veterinarian to establish themselves as independent contractors and work wherever needed.
How Does This Practice Arrangement Benefit Veterinarians?
Veterinarians are often left with a decision to make regarding their own future. That decision involves whether they will ultimately decide to be an independent contractor or if they wish to pursue the full-time employee route. Some are tempted to sign on as employees simply because they are already familiar with working in this fashion. However, there are some upsides to being an independent contractor that should not be ignored.
Controlling your own time and hours is a tremendous upside to working as an independent contractor. There may be some situations in which an individual has to be at a particular location for a set time, but they are the ones who are entirely in charge of their schedule and deciding where they will go at any given time. A flexible work schedule allows them to do their best work when and where they want to:
You can have a very flexible work arrangement as a contractor, especially if you’re on a self-regulated schedule, working the hours you want and need. This also means that you can fit your schedule in with your lifestyle aspirations, deciding when the best time to work is.
Higher Earnings Potential
Taking on higher-paying work is always possible when someone is actively working as an independent contractor. They are never locked into one employer. This means that they retain the possibility of working for another company if they determine that their skills will be more handsomely rewarded somewhere else. These opportunities arise from time to time, and it is nice to know that you can take them on as an independent contractor.
The Ability to Turn Down Work
Establishing strict work-life boundaries is important to many people these days. There is a burnout crisis in the veterinarian industry, and some vets are saying enough is enough. They do not want to put their mental and physical health on the line for any employer. Thus, plenty of vets are looking to go the independent contractor route to save themselves on some of the emotional damage that working far too many hours puts on them.
This all probably sounds pretty great, but make sure you have a veterinary contract lawyer look over any veterinarian independent contractor agreements before you sign them just to be safe.
Do Employers Like IC Agreements?
Technically speaking, the party that is paying money in veterinarian independent contractor agreements is not an employer. That is one of the upsides of working as an independent contractor. The party that pays money in this scenario is avoiding many of the responsibilities of being an employer. Instead, they agree to a particular service at a specific price and contract with a veterinarian to provide that service. If both sides of the arrangement can agree on the price, then everything is all set just perfectly.
The reasons why companies like IC agreements are because:
- Less Liability – Independent contractors do not have the same rights to bring a lawsuit if they feel like they are being discriminated against. Obviously, companies should not discriminate against someone providing a service to them at any time. Still, they can rest a little easier knowing that they are shielded from accusations that they have done something like this.
- No Benefits are Provided – Employees are often provided a whole buffet of benefits to come and work at a specific place. The same is not valid for independent contractors. They don’t have to be offered anything. Thus, companies will often look to bring in independent contractors to fill some of the gaps in the services that they currently provide.
Consultation with Chelle Law
When your veterinary contract is analyzed by an experienced attorney, you will find financial benefits which end up outweighing the cost of the review. Leave it to the experts. If you are in need of assistance with a veterinary agreement or contract analysis schedule a Veterinarian Agreement Review with Chelle Law today!
Veterinary Contract Questions?
Contract Review, Termination Issues and more!