Private Practice Equitable split.

[psychpro]

I am starting at a private practice as an independent contractor. There are a few things about the offer that are making me feel iffy. It is a private pay clinic, and I will be growing my caseload over time. I will be paid a little over $100/client for a 45 minute session. With 30 clients that is over $3,000/week assuming everyone shows with 22.5 clinical hours. Here is the part that doesn't feel so good.

1. As an IC I get no benefits which I'm okay with as I will be making enough to afford benefits, and still enough money for food and bills.

2. The contract asks for a time commitment of ~4 years (I feel like as an independent contractor I should have more freedom in terms of how long I work, etc.)
3. There is a clause that I am not allowed to contract with another private practice.
4. If there is an interest/expertise I would like to develop, rather than do it part time, they would prefer I build it at the center under them (This feels weird bc why should they have access to something I am building out independently?)
5. The split is under a 50-50. While I am happy with what I will be making a split just under 50-50 feels a bit much. (Keep in mind I will be receiving supervision, and plan to renegotiate after I am independently licensed).

What are your thoughts? Does this feel a bit exploitative as well? Or am I being a bit greedy?

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[WisNeuro]

It's tough to compare with the supervision aspect. Personally, there are two things here that are a no-go from me, regardless of the other details. I will never sign a no-compete. They're largely unenforceable anyway, but it's the principal for me. Also, the time commitment sounds a bit absurd. I wonder if that is due to your status as still requiring supervision or if that is part of general contracts there.

I would recalculate with at least a 10% no-show rate. Never assume 100% show rate.

 

[psychpro]

It's tough to compare with the supervision aspect. Personally, there are two things here that are a no-go from me, regardless of the other details. I will never sign a no-compete. They're largely unenforceable anyway, but it's the principal for me. Also, the time commitment sounds a bit absurd. I wonder if that is due to your status as still requiring supervision or if that is part of general contracts there.

I would recalculate with at least a 10% no-show rate. Never assume 100% show rate.

Thanks for your feedback. I hate the non-compete things especially in a field like ours, where we are a huge part of the change that happens. The length of stay is a bit absurd as well, bc I would only need supervision for approximately 6 more months. I would need to be a bit more sure about what happens after I'm independent bc if it switches to 60-40 that is more palatable. Not ideal but it doesn't feel so exploitative with that line up. There is also a subspecialty I have an interest in exploring that isn't available at the practice, and it feels wrong to have them be able to profit off something I have to hustle to build. The money still works with a 10 or even 20% no show rate, so it is not that I won't have enough money. I will but I guess it gets into the question of how much should someone be able to get from me for providing referrals, office space, practice software, and administrative support.

 

[bluecolourskies]

So if you are a 1099 contract worker, I think they are not allowed to say you can’t contract with anyone else. Essentially as a contract worker, you are your own “business” and they can’t tell a business who they can and can’t do business with. I also don’t think they can tell you that you have to work there for at least 4 years.

 

[ClinicalABA]

Check your local regs regarding non-competes. Not only are they often unenforceable, they may be prohibited in some jurisdictions. They're not allowed for psychologists in my state (MA), and in other disciplines/fields may even require a "garden clause" (look it up - sweet deal if you can get it). Also, don't forget to add in expenses like malpractice, license fees, CEUs, materials, etc.

 

[MCParent]

The exclusivity clause is not 1:1 forbidden; ICs can be asked to do full time exclusive effort.
They can ASK for 4 years but there would probably no way to enforce that.

 

[psychpro]

Check your local regs regarding non-competes. Not only are they often unenforceable, they may be prohibited in some jurisdictions. They're not allowed for psychologists in my state (MA), and in other disciplines/fields may even require a "garden clause" (look it up - sweet deal if you can get it). Also, don't forget to add in expenses like malpractice, license fees, CEUs, materials, etc.

Great suggestion!! I just checked, and they are not legal in my state either.

 

[psychpro]

So if you are a 1099 contract worker, I think they are not allowed to say you can’t contract with anyone else. Essentially as a contract worker, you are your own “business” and they can’t tell a business who they can and can’t do business with. I also don’t think they can tell you that you have to work there for at least 4 years.

What I thought. It seems like the line between an IC, and employee are being blurred.

 

[psychpro]

The exclusivity clause is not 1:1 forbidden; ICs can be asked to do full time exclusive effort.
They can ASK for 4 years but there would probably no way to enforce that.

Yeah...... It is weird having to navigate the professional world, and having to think about these types of scenarios. Who knows? I may want to stay that long, but it feels iffy demanding that so early in the process, as we are still building our working relationship.

 

[PsyDr]

Sign that contract like a trophy wife who knows that the prenup is invalid. Know that it’s not a 1099 situation and that non competes are not inforceable. Get licensed. Get enough capital to do you. Then go to the principal, and tell them that they can re-negotiate or you’re be reporting them to the state labor department and the IRS.

 

[clausewitz2]

Sign that contract like a trophy wife who knows that the prenup is invalid. Know that it’s not a 1099 situation and that non competes are not inforceable. Get licensed. Get enough capital to do you. Then go to the principal, and tell them that they can re-negotiate or you’re be reporting them to the state labor department and the IRS.

Very dependent on state law; in mine state courts have ruled in some situations that independent contractors are bound by non-compete clauses in a situation in which a contractor had no prior experience in a field, got substantial training from their employer, and while working with that employer started their own business in exactly the same sub-field using the techniques they were taught and introduced to by their employer. The court felt that there was such a substantive contribution and investment by the employer in developing the contractor's capacities that it was reasonable to prevent them from simultaneously competing.

In a way it would be better if they weren't the ones giving you specialized training in the subfield you mentioned, as them providing that could be a compelling legal argument for upholding the non-compete. Unfortunately the IC/employee line in practice is mushier than might be ideal and it just takes a judge with a different opinion about where that line might be to cause a problem. This sort of non-compete in at least my state would not be a prima facie misclassification of OP as an IC.

 

[Sanman]

Given what has already been said, you need to weigh your options. I would get a better understanding of how the split changes when you are licensed and what kind of split they would be willing to accommodate if you did develop a new area of interest what split and start-up costs would they consider (do not tell them your idea). If it is not to your liking, you can always do as @PsyDr mentioned follow the terms of the contract get licensed and use your new interest to build up a side practice that does not compete with theirs and leave when your contract is up...."preferences" be damned. 4 years may or may not be a such a bad thing depending on how much time you might need to get licensed and have everything processed and then build a cash cushion.

 

[AcronymAllergy]

Quick reply: I agree that at the very least, you're going to want to get written into the contract how the split changes once you're independently licensed. I can understand their reasoning for #3, but I don't know the legality of it. Maybe adjust the wording so that although you can't contract with another private practice, it doesn't bar you from providing services outside the practice independently. Which gets to #4--like you, I'd be a bit wary here.

 

[ClinicalABA]

Very dependent on state law; in mine state courts have ruled in some situations that independent contractors are bound by non-compete clauses in a situation in which a contractor had no prior experience in a field, got substantial training from their employer, and while working with that employer started their own business in exactly the same sub-field using the techniques they were taught and introduced to by their employer. The court felt that there was such a substantive contribution and investment by the employer in developing the contractor's capacities that it was reasonable to prevent them from simultaneously competing.

In a way it would be better if they weren't the ones giving you specialized training in the subfield you mentioned, as them providing that could be a compelling legal argument for upholding the non-compete. Unfortunately the IC/employee line in practice is mushier than might be ideal and it just takes a judge with a different opinion about where that line might be to cause a problem. This sort of non-compete in at least my state would not be a prima facie misclassification of OP as an IC.

I'm sure you know this, but you (the general "you", not "you, clausewitz2 specifically) need to look at any laws specific to psychologists, as well as general non-compete regulations, as these might appear in different parts of the state codes. The general law in my state allows for non-competes, with some restrictions similar to what you mention (as well as the "garden leave clause" where the employer must pay you 50% of you highest salary from the past year during the time that they wish to enforce the clause). There are specific laws elsewhere regarding the "common good of the citizenship" belief that an employer-employee agreement should not negatively impact the ability of the citizens to access medical or mental health care, as would be the case if a psychologist was taken out of the "pool" of available providers due to enforcement of a non-compete. This also allows prohibits emplyers from requiring that a psychologist (or physician, social worker, etc.) agree to not continue with clients in a different practice. Basically, the only thing that can get in the way of patient seeing the provider that they want to see should be the availbility of that provider to give and be paid for that service, rather than a contractual aggreeement with a third party.

As PsyDR said, if the law is on your side, it's probably not going to be an issue if you sign a non-compete. The agency probably knows it's not enforceable.

 

[PsySeeker]

So if you are a 1099 contract worker, I think they are not allowed to say you can’t contract with anyone else. Essentially as a contract worker, you are your own “business” and they can’t tell a business who they can and can’t do business with. I also don’t think they can tell you that you have to work there for at least 4 years.

They also can’t provide training/supervision. The contractor thing in our field is an exploitive joke.

 

[PsySeeker]

Sign that contract like a trophy wife who knows that the prenup is invalid. Know that it’s not a 1099 situation and that non competes are not inforceable. Get licensed. Get enough capital to do you. Then go to the principal, and tell them that they can re-negotiate or you’re be reporting them to the state labor department and the IRS.

That may technically be extortion, but I like where your heads at.

 

[MCParent]

Also—given the above I would have the contract read by your own lawyer since theirs might not be very good. Less so for the issues you mentioned though; I’d be more worried that, if they have these things in there, there might be something else in there, even in error, that could actually screw you over later.

 

[AcronymAllergy]

They also can’t provide training/supervision. The contractor thing in our field is an exploitive joke.

I hadn't thought of that, but it's a very good point. I can't see how you could reasonably explain that someone is an independent contractor when they aren't able to practice independently and you're the one supervising them. That sounds like a disqualifying criteria to me. The combination of the 4-year time commitment, limit to contract with other agencies, and request that you build up any additional interests/expertise under them also sounds disqualifying.

Caveat: I'm no employment lawyer, and this is of course not legal advice.