David vs. Goliath: How Dental Startups Can Triumph Over Corporate Dentistry
August 10, 2024
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Are you an associate dentist contemplating the path to practice
For associate dentists researching dental practice startups, having the right lawyer is imperative to protect the hundreds of thousands of dollars you will invest in the practice.
But even more important—when you understand the top legal issues for dental practices, you can protect the rest of your career.
In this article, I’ll provide you with invaluable information about the top legal issues in dental practices.
When you read to the end you will learn:
You will also read about how one doctor’s dreams nearly didn’t happen because of a hidden legal issue.
Dr. Mike and his wife, Stephanie, dodged a legal deathtrap. They went on to successfully open their dental startup with hundreds of new patients in the first month.
My name is Jayme Amos, CEO of Ideal Practices. We’re the experts in helping dental associates become highly successful practice owners. By the end of this article, you will learn how our team of experts went above and beyond to help Dr. Mike and Stephanie put things back on track the right way.
Having helped hundreds of dentists open and thrive in dental practice startups, I want to share some of what I have learned regarding the top legal concerns for new dental offices. It is my hope you will benefit from this helpful information.
I desire to prepare you properly, the first time, while you’re in this research stage.
Wondering what a “Dental Lawyer” is? If you were to look up the types of attorney specialties, you wouldn’t find the term “Dental Lawyer.”
However, with the proper research, you can find a small group of attorneys who have worked with at least 100 dental associates. You will want to find an lawyer with at least this much dental-specific experience, as this is what makes them the best attorneys for doctors considering a dental startup.
Just like a specialist in dentistry, specific cases have the most predictable outcomes when placed in the hands of a specialist who has devoted their career to that specific niche.
The same is true when selecting a dental attorney for a startup.
Which dental startup topics are important enough for you to seek guidance from a dental practice lawyer?
Keep reading to find out.
Are you an associate dentist contemplating the path to practice
Opening a new dental practice is an exciting journey, but
Deciding between launching a new dental practice and acquiring an
When you think about legal matters for a startup, do you break out in a cold sweat?
Many associates ask these kinds of top questions:
Let’s address those questions here.
Before you begin researching where to open, study the legal implications of your employment contract.
Better yet, before you accept any associateship job, integrate the legal strategy for your new practice into the terms of your contract.
For example, many of the doctors in our consulting program begin their business office startup planning before signing their associateship job paperwork. Our team of consultants often reviews employment contracts and suggests revisions before you choose which job to take. This saves you on legal bills and aligns the planning for your startup in the safest way.
Overkill?
No! The best dental practice startups in the country follow this model.
See, the danger is that your associateship can legally prevent you from opening your startup where you want – or even when you want. Doctors who don’t plan this properly can find themselves excluded from entire states. Don’t believe me? Keep reading.
Your associateship will provide a good income for you and your family today. So, we need to ensure you have a great job before you open your doors. But we also want you protected so you can open your practice where and when you want in the future.
This is key. Because in comparison, your startup will provide an income for you and your family for decades.
Therefore, when making a decision for today, be sure to consider tomorrow. Ensure your associateship contract plays a supporting role in your dental office startup business plan.
The non-compete clause is the portion of your employment contract stating how far away you are excluded from working. The non-compete is often misunderstood as a simple topic of mileage.
Unfortunately, there can be legal issues that are much more complex. That can impact you in ways you never realized.
Let’s consider one legal theory found in some dental employment agreements: The Olympic Ring Zone.
Every two years you have the chance to watch some pretty amazing athletes from all around the world do incredible things. Surely you are familiar with the Olympic rings—the five rings of different colors that all intersect and overlap.
Now imagine each ring representing a five-mile radius on a map. If your non-compete clause includes all existing and possible future locations, the potential concentric circles could legally exclude you from working in many cities—or even states.
Think about it: What if your associate is with a group practice that expects growth in multiple areas? Or is corporate, with hopes of being the next McDonalds of Dentistry?
Can you imagine all those rings on a map? How drastically could this affect your ability to work where you want to work if there are 10 rings? Or even 20?
Learn more about the Olympic Ring Zone in this article.
Of all the concerns related to the non-compete clause, ask yourself if your employment contract prohibits you from activity in any of these six categories:
Be careful as you study your employment contract. Some or all of these topics may be in it. Even if you read it thoroughly and don’t see a concern, you would be wise to receive a dental associate contract lawyer’s opinion.
Reading a legal contract is like looking at a radiograph for the first time. Until you have seen a few hundred, it’s nearly impossible to diagnose properly. In addition, each state has its own laws. For instance, if some guy on a Facebook group tells you your contract isn’t enforceable, he might be right—in his state. But what about yours?
Don’t be like a patient trying to self-diagnose by looking at a radiograph for the first time.
What about enforceability?
Most associate dentists will ask if their non-compete is legally enforceable.
This is a great question.
My response to the hundreds of dentists I’ve helped with dental startups is always this: Is it worth getting sucked into an expensive lawsuit to find out? As a simple rule of thumb, if you have even a mild concern about your non-compete, stay away.
The implications of a non-compete contract can include expensive and painful consequences. Better to be safe when the stakes are as high as protecting the financial health of your future practice. Take this seriously.
With all legal concerns, and especially your non-compete, this topic needs precise guidance for the practice plans you desire, before you tell your employer.
Through my personal portfolio and our startup dentist clients, I’ve been a party to over $100 million in real estate transactions. The information you are about to read could save you from some of the biggest—and most expensive—mistakes I’ve seen.
First, before you sign for your real estate (with a purchase agreement or a lease), my team of consultants reviews your real estate documents to ensure they fit with the plans for your new practice.
Then, we share those top concerns with your dental attorney, coordinating the entire process. This extra set of eyes is a huge advantage to you.
Below, I will share with you some of the top legal issues you should consider for renting or buying.
If You Rent: Leasing Concerns for Startups
First, it’s important to remember that your landlord’s attorney wrote the rental agreement to protect the landlord. Landlords invest tens of thousands of dollars to protect their interest in the real estate.
Unlike residential real estate (where tenants have many layers of legal protections), commercial real estate gives the landlord all the legal control.
Read that again.
The more you understand these implications, the better off you will be.
Your goal as a tenant is to get as much protection as you can.
This is why you need a dental practice lawyer to protect your investment.
How much should you spend on legal fees for a lease review?
Normally, dentists are surprised at how high the legal bills are for real estate lease reviews.
But I want to show you why the right legal review is protecting at least $660,000 in your future.
How Much Is Your Dental Lease Protecting?
Let’s do some hypothetical math. We will pretend your rent is $3000 per month.
There is often a danger of assuming your financial responsibility with a lease is only as expensive as next month’s rent. But you will be shocked when you consider the math.
Your ASSUMED Rent Liability: $3,000
But the reality is that you will be legally responsible for the rent payments during the entire term of the lease. This means 5-10 years of rent payments.
ACTUAL Liability (3K x 120months): $360,000
In addition to this, you will have a compounded liability that most associate dentists are never taught about.
If you rent, you will most likely invest hundreds of thousands of dollars into construction and improvements into the landlord’s building. You can’t take this with you. When you sign your lease, you are committing to a compounded investment into this building.
Construction and Improvement Costs: $300,000
Therefore, your compounded liability is the ENTIRE investment you are making in the building. This includes your ACTUAL rent liability in addition to your construction costs ($360K + $300K).
COMPOUNDED Liability: $660,000
Why is the compounded liability important to you?
Because this is how much money you are PROTECTING with your Dental Attorney’s help. It’s a $660,000 investment.
Clauses in a Dental Lease
Do NOT try to negotiate your dental practice lease on your own. Just don’t.
Listen—I’m not an attorney, and I get nothing for saying this. But if you value the legal protection of your future practice, you want to hire a dental lawyer. It is worth the cost.
There are hundreds of ways you can lose your life savings in subtle, hidden clauses in your dental lease. You can even lose the value of your entire practice—to your landlord. I’ve seen it happen.
Frankly, it is virtually impossible to protect your practice if you attempt to represent yourself in legal negotiations with a landlord.
Worst of All – The RELOCATION CLAUSE
Don’t be like the dozens of doctors who contact my consulting firm after receiving the dreaded news that the practice is legally being relocated against the doctor’s will. It happens. But it could have been avoided with the right real estate legal strategy.
In summary: Get a great dental attorney who has helped at least 100 dental startups.
Don’t end up as someone else’s case study about doing things the wrong way.
If You Buy Real Estate: Concerns for Startups
Buying real estate is not complicated from a legal perspective. The transaction is a fairly simple legal process.
The bigger concerns come with being allowed to build a dental office in your newly owned real estate.
Each of the following must be explored from a legal perspective before you purchase.
Zoning:
“Zoning” refers to the type of business you are allowed to put in a piece of real estate. For example, you can’t put a factory in the old pizza shop. Towns have zoning laws about this.
Some doctors purchase a building only to find out it is legally impossible to open a dental office. Imagine the massive stress and financial loss!
Before you sign a purchase agreement, your dental attorney must ensure the zoning for that piece of land meets the town’s requirements for a dental office. EVERY TOWN’S ZONING LAWS ARE DIFFERENT.
Ignore what the so-called experts in Facebook groups try to tell you. You’ve been warned.
Parking:
Most towns require a certain number of parking spots based on the type of business and the size of that business. This number differs from town to town.
For example, a small shoe shop may need just three spots. Your practice may need 10. Or 20. It all depends on the size of your practice and the town’s rules.
PARKING IS ONE OF THE BIGGEST REGRETS IN DENTAL CONSTRUCTION.
Most every doctor desires more parking, but some find out the hard way that they legally cannot build the practice to the size they desire because there aren’t enough parking spots. Imagine the implications of buying a building and realizing you can’t open your practice because of parking! You may think your patients can park next door–or across the street. Good luck with that.
Instead, avoid the stress, the cost, and the headaches by having the guidance of a dental practice lawyer who has helped at least 100 practice startups.
Have you heard this advice before?
Drainage:
Years ago, I helped my client Dr. Dan in Pennsylvania. He was told about a requirement to invest $40,000 in the drainage system to open his practice. It still shocks me that a few sewer grates and big plastic pipes in a small parking lot can cost so much. Thankfully, he knew about this before he bought the building.
But Dr. Danny didn’t know. He’s in a small town in Iowa, where the local permitting department is one guy named Inspector Joe. True story.
Inspector Joe never told Dr. Danny or his attorney about the $50,000 drainage system required for the corner property.
Dr. Danny got his permits and started construction on his new dental office—all signed off on by one of the top dental lawyers.
But Inspector Joe came by one day and said construction had to stop until Danny installed this $50,000 drainage system.
Dr. Danny already had his permits. And his loans. And his plans.
But no one from Inspector Joe’s office ever told Dr. Danny about the required drainage investment.
After the attorney reviewed the options, his advice to Dr. Danny was simple:
“You can fight the town and probably win. But do you want to make all those enemies in this small town along with all the delays and stress it will bring you?”
The answer was a simple and painful no. Our team found Dr. Danny the additional funding, but the whole process was a surprise to everyone involved.
Here’s the point: a great dental attorney will protect you, even if it prevents him from earning billable hours from a drawn-out drainage lawsuit that you will likely win.
And the moral to the story? Get a great dental lawyer if you want to buy real estate for your practice!
Avoid the temptation to become your own legal counsel.
There are just too many little, hidden, subtle things that could cause a problem. You wouldn’t expect your patient who has never read an x-ray to self-diagnosis based on their pano, would you?
Think again about Dr. Danny. Even an experienced dental practice lawyer can miss something they were never informed about and would never have thought to consider. Obviously Inspector Joe knew a corner building would require the $50,000 drainage, but he never mentioned it.
If an experienced dental attorney can miss something like that, imagine what you, a dentist—not an educated, trained, and experienced attorney—could miss. The possibilities are endless.
Can you imagine the potential consequences of your patient trying to save money by performing his own dental procedures? Sure, patients can participate in basic things like home hygiene, but you wouldn’t want them to try to fix a broken tooth with superglue, would you?
We all need experts from time to time. If you want to open a successful dental practice without risking hundreds of thousands of dollars, you will need the expertise of a dental lawyer.
Remember the subtleties of the Olympic Ring Zone? This is only one of the hundreds of potential hidden, surprising legal language that hurts dentists.
Don’t sabotage your future practice by misunderstanding the negative effects of subtle legal language.
Don’t try to be your own attorney.
Which legal structure is best for your dental practice startup?
Here are six possible entity structures you can consider:
When opening your dental office, there are important legal structure choices you will need to make. Each option has strengths and weaknesses.
Every situation is different. Your practice and your personal goals will shape this choice.
This decision will be affected by things like:
Researching this topic on Google may take dozens of hours of your time and still leave you without a customized answer for your life, your practice model, and your state.
Instead, work closely with your dental startup consultants, your dental law firm, and your accounting firm to balance all the right choices.
This choice is too important to get wrong. You need assistance to get the best outcome, get it right the first time, and have a customized plan for your needs and desires.
A COLLEAGUE’S LEGAL CASE STUDY
Dr. Mike’s Dental Office Startup Nearly Never Happened
As promised at the beginning of this article, I will now share an eye-opening case study with you.
Once you hear the story of Dr. Mike and his wife, Stephanie, you will understand even more the importance of a dental attorney.
Dr. Mike’s career options nearly ended prematurely…
It was Friday night. I wanted to call Dr. Mike all day but knew he would be busy. So I painfully waited. All day.
It was Dr. Mike’s grand opening day, and I was so pumped to talk with him!
Stephanie answered the phone. The sounds of their son’s basketball game going on in the background came through the phone as Stephanie told me Mike was parking the car and would love to say hello—if I could wait.
More waiting…
But it was worth the wait to hear Stephanie’s excitement. She was still on a high from the day’s results. And for good reason!
Dr. Mike’s team had a huge opening. Hundreds of new patients had already made appointments, and the calendar for the week was full. What a way to open, right?
Finally, Dr. Mike hopped on the phone.
And immediately I heard something different in their voices—pure emotion.
You see, Dr. Mike and Stephanie almost didn’t have a practice…
A year earlier, they attended my Startup Practice Blueprint Course. (More on that below).
I’ll never forget seeing them in the audience during the first session. I was describing the amazing possibilities for the dentists in attendance when I noticed a woman sobbing in the audience. It was Stephanie.
At the break, she and Dr. Mike pulled me aside. They told me their story and described their dream.
But they were trapped in an associateship with major legal problems. They had been stuck for over a year and didn’t know what to do. The employer was using very unfair legal tricks, preventing MIke from opening a practice.
Promises were broken. The practice was imploding.
Dr. Mike couldn’t do the things he wanted. He couldn’t open his own practice due to legal issues. He couldn’t care for patients like he wanted to. Their dream had become a prison.
Keep reading. This is where it gets really good.
After the course, Dr. Mike and Stephanie applied to be one of our consulting clients and were accepted.
After their deposit was in place, we scheduled their vision call. It was a 2-hour strategy session for planning their dental practice startup, their future, and the rest of their lives. (Keep reading if you are interested in your personal vision call.)
After the Vision Call, Stephen, the president of Ideal Practices, called me saying there was a major problem.
He expressed grave concerns about some complex legal issues. It appeared Dr. Mike wouldn’t be able to practice in the same town for years.
Instead of looking forward to decades of growth, Dr. Mike and his wife were facing years of waiting—if it could ever even happen.
Stephen held calls with the top dental lawyer.
Then, on the third call, we got Dr. Mike and Stephanie on a conference call with him. We talked for hours (at no extra cost to Dr. Mike and Stephanie) to create a plan.
Even after that call, Stephen told me that there was only a 1 percent—maybe a 5 percent—chance that what we proposed on the call would actually work.
But neither Stephen nor I could accept that. We believed in Dr. Mike and Stephanie. They deserved the freedom to pursue their dream.
We pulled in our entire team – the best attorneys, accountants, and dental practice startup consultants in the country. For four months, we pooled all our efforts to negotiate the right legal and creative strategy.
The goal: For Dr. Mike to break free from the toxic relationship and be allowed to open in his hometown.
Four months turned into nine months. Each step of the negotiation felt like a tightwire that could tip either way.
It was such a delicate balance. Each step had to match Dr. Mike’s startup vision for his family in his community. All while not angering the practice owner.
Then, in month ten, something happened.
It worked.
The practice owner SIGNED!
It felt like we all finally crossed the finish line of a marathon. The rush brought on a team-wide celebration!
Even though it took three times longer to initiate Dr. Mike’s new dental office than it should have, it worked.
Dr. Mike and Stephanie finally broke free and had the freedom to work in their town, on their terms.
Through all this, Dr. Mike and Stephanie incurred no extra charge from us – but they did get our very best efforts, for as long as it took to succeed. This is about caring for real people who put their trust in our team.
We finished the marathon “legal hurdle” together.
And Dr. Mike and Stephanie finally got to enjoy beginning the startup process.
…Back to my call with Stephanie on the bleachers at the basketball game…
Stephanie said, “Here he comes! Can I put you on speakerphone?”
In his charming southern drawl, Dr. Mike said, “Oh my gosh, Jayme, we made it! It’s changed our lives! We can finally run our practice the way we want and care for patients the way we want to. It would not have been possible without you. Without all of you.”
I’m not ashamed to say, that story makes me proud enough to tear up.
Practice ownership is that good—and it’s worth fighting for. Because when you find the right path and the right vision, your entire life changes.
You can trust us to find the right path for you.
For our high-level consulting clients, failure is not an option. I take it personally. My clients’ success is my success, and I searched high and low to build the best firm in dentistry for startup practices.
We now help more dental startups than anyone in the country. And the successes of our clients will amaze you. Hundreds of doctors have followed our process, and their lives are on a completely new path.
We’re not a law firm, but we work side-by-side with the top dental attorneys in the country, each with decades of experience assisting hundreds of dentists with the legal issues involved in:
If you’re researching a dental startup, the legal experts we work with are attorneys who have been there before you. They’ve seen the best and the worst.
I’m telling you this so you can understand the magnitude of impact these legal topics can have on your life. For the good of your future, you want to make sure each one is woven into your perfect, customized plan.
Let’s put all the knowledge and experience to work for you, saving you from legal problems that you may never have seen. Saving you from feeling trapped by contracts you thought looked good.
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I want you to hear from one of the experts for yourself.
I hosted an interview with Rob Montgomery, one of our respected and highly experienced dental lawyers, as well as Dr. Paul Goodman, residency faculty member and multi-practice owner, and Dr. Richard Low, military residency and host of The Shared Practices.
Ready to Apply to Work one-on-one with the top dental startup consulting team in dentistry?
Here’s to you and your future!
Jayme
DISCLAIMER
None of the content in this article is being offered as legal advice. For any legal matters, speak with an attorney licensed in your state.
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Contrary to popular belief, Lorem Ipsum is not simply
random text. It has roots in a piece
The standard chunk of Lorem Ipsum used since the
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