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Contract Negotiations – Understanding Letters of Intent

Published on: Dec 20, 2018


AMA senior attorney Wes Cleveland knows his way around the contracting process. In the second episode of the popular podcast series, Making the Rounds, he discusses letters of intent and why physicians should consider hiring an attorney to review these documents.

First, what exactly is a letter of intent? A letter of intent is an initial letter an employer can provide that sets the expectations of a negotiation process. They may provide this document to make sure you have the same understanding of the parameters of terms you are negotiating. The letter may include information on the length of your term of employment, expected compensation and benefits, and a list of your expected duties.

Letters of intent are not typically binding, but it can vary by state. Cleveland recommends if you receive a letter of intent to have an attorney review it. Even if the letter of intent is non-binding it can create expectations on the employer side that can make it more difficult for you to depart from the terms you are negotiating like salary, flex time, and other important factors in your decision.

It is important to consider all the factors that may be at play in your final contract. Important considerations include vacation and personal time off. Will the company provide a cell phone or company car? Will they cover life insurance, license fees, credentialing, and application fees? Will your employer pay for your CME? Will you get time off to go to conferences and will your employer fund your attendance (registration fees and travel). If you are looking for flexible hours, be sure to state that, and if you are working full time take care to understand how full time is defined. Does full time include weekends and evenings?

With so much at stake, it is wise to retain an attorney when working through your negotiation process – from letters of intent through employment contracts. Physician employment contracts have special considerations, so be sure to use an attorney with a specialization in physician contracts. The attorney will know the market, and they may also know the employer and its culture and its reputation.

For more information on letters of intent and the negotiation process, listen to episode 2 in the podcast series Making the Rounds.