The Dentist's Network #54


	Dental Partnerships Alt. Dispute Resolutions Website Search Engines

Thomas L. Snyder, DMD, MBA
Managing Partner
The Snyder Group, LLC
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Should a Senior Partner Receive a Management Fee?

In forming partnerships, a common question raised by the senior partner is whether or not she/he is entitled to receive additional compensation for spending non-chairside time performing managerial tasks. The answer to that question is, “It depends.” The deciding factor is if the new partner assumes additional managerial tasks versus allowing the senior partner to spend hours per week managing the practice.

In many cases where associates have been working in the practice for several years before becoming partners, they often fall in the trap of just being a clinician and not showing any interest in management issues. If that behavior doesn’t change once they become partners, a strong case is made to compensate the senior partner for spending additional time performing managerial tasks. Of course, this responsibility goes both ways in that the senior partner should make attempts to involve the young doctor in managing the practice during the associate phase. If not, bad habits can be formed and your new partner becomes an associate with ownership privileges!

One way to address this issue is to pay the senior partner a management fee. This management fee is considered an operating expense of the practice. The payment of a management fee is a fair acknowledgment for the time and effort that the senior partner is making. Often these tasks amount to hours per week (sometimes weekends)—administrative time that could have been spent clinically or simply as personal time. In any case, it is an imbalance that, if not recognized, can create potential rifts in your partnership relationship, so we feel that it is not at all inappropriate to charge a modest fee for performing these managerial tasks. Such tasks may include:

oversight of personnel
compliance issues with OSHA and HIPPA
maintaining proper dental supply inventories
tax matters—oversight of bookkeeper and payment of bills

In some instances the senior doctor may be in charge of writing all checks, but in this case we recommend that a bookkeeper be hired as an alternative. In our experience, a fair compensation range for a management fee is $2,000 to $2,500 per month.

An alternate format, in lieu of a fixed payment, is to compensate the senior partner via a percentage of gross revenue or net profit. This can be a win for the junior partner in that the senior partner only receives compensation in the event that the practice shows growth or maintains good profit margins.

For example, in practices generating less than $1,000,000, consider 5% of Total Available Partner Compensation for that year. Available Partner Compensation is defined as Practice Revenue (Collections) minus Practice Operating Expenses. In practices generating in excess of $1,000,000, consider a 3% Bonus Payment of Available Partner Compensation. If the practice’s Available Partner Compensation decreases in a particular year, no bonus payment is made.

Another approach is to set goals for practice growth and base an incentive payment on Gross Revenue. For example, a payment of 10 to 15% of the revenue in excess of the prior year’s revenue works well. The only caveat here is that the practice’s overhead ratio must not increase or the incentive bonus would not apply.

At the end of the day, the ideal situation is that partners share management responsibility equally so that no management fee or incentives need to be created. However, in cases where one of the partners is only really interested in providing clinical services and has no management interest, it is only fair that the other partner be financially compensated appropriately to account for the time that is often spent after hours and/or on weekends.

Dr. Thomas L. Snyder is Managing Partner of The Snyder Group, LLC, a nationwide practice transition and financial management consulting firm. With more than 75 years of experience in the field, The Snyder Group can provide you a full range of services relating to practice transition matters and retirement planning. They can be reached directly at 1.800.988.5674.

If you would like additional help, email Dr. Snyder at drsnyder@thedentistsnetwork.net.

Interested in having Dr. Snyder speak to your dental society or study club? Click here.

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Michael Moore, Esq.
Director McKenzie
HR Solutions
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Why Alternative Dispute Resolution?

“ADR” means alternative dispute resolution. The concept of diverting legal disputes from the courtroom to other forms of resolution has been around a long time. The granddaddy organization of ADR is, of course, the American Arbitration Association. Long used by corporations to conclude disputes about contract issues, in the last ten years more and more employers have adopted ADR as their exclusive vehicle for dealing with employee legal claims. Why is that? And why should you consider it for your practice?

As those of you who have been following these articles already know, we advocate an entirely new employment relations concept—one that replaces punitive measures in dealing with employee performance and behavior challenges with consensual interaction and responsibility. Our system not only builds employee confidence in what treatment to expect from a practice but, if properly followed, also creates a document trail that shows a practice in its true form of concern for the employee.

But even with our system, and even with it being consistently followed with the assistance of our Solution Center support, the possibility exists that one employee will not get the message. Unfortunately, there are always lawyers out there who might take a flyer at an employer, hoping for a quick settlement of a claim. But once a lawsuit is filed, it is much like a freight train—very hard to bring to a stop. And the longer a case goes, the higher a doctor’s legal bills climb. It is an unfortunate truth today that even with a successful defense of a suit, a practice will incur easily $25,000 in fees and costs (and more likely twice or three times that amount).

So how could ADR make this admittedly undesirable—almost unthinkable—process less costly and time-consuming? Let’s look at the typical policy.

First, the agreement to submit all claims to ADR is a contract. You can document the agreement by inclusion of a provision in an application, or in a separate document. An explanation of the process is accompanied by the employee’s signature acknowledging receipt and acceptance. The employee’s continued employment is the consideration that makes the promise enforceable by either side.

Most ADR policies include two phases: mediation and arbitration. Mediation simply means that the parties choose a neutral individual to hear the grievance and try to bring it to a close by settlement. Failing that, the parties have the option of demanding arbitration. As the cases say, committing the dispute to arbitration “ousts the courts of jurisdiction.” The employee may not file suit. The claim is ordinarily submitted to a single arbitrator chosen by the parties from a panel of lawyers.

Employment arbitration disputes have been the subject of many cases in the last decade, and the court decisions have created the parameters of an enforceable agreement. Following those decisions, ADR organizations like the AAA have developed specific rules for arbitration of these kinds of claims.

The advantages of arbitration for the employer are these:

The arbitrator’s decision is not subject to appeal, except in extraordinary circumstances.
The amount of “discovery”—requests for production of documents, sworn depositions, etc.—available to the employee is dramatically reduced from that which could be had in a court. This means that not only is there a substantial savings of money but also less likelihood the plaintiff might uncover documents or information that could be detrimental to the defense.
The time from filing a claim until resolution is usually months—compared to years for a court case.

Having a case hang around for years produces great anxiety in everyone involved. It is much better for emotional well-being and business well-being to have such claims resolved at the earliest stage possible.

The primary downside of the arbitration process is that the courts have ruled that the employer cannot demand the employee pay proportionate costs of administration and the hearing officer fees. Hence, you the doctor will pay those fees, save for a small initial fee paid by the employee when the claim is filed. Our opinion, however, is that these expenses are more than offset by the savings in defense and discovery costs that would accrue if the case were in court.

The one caveat on ADR is that the courts continue to refine what is and is not an enforceable agreement. Here are two examples of decisions that have come down just this last week. In the first, a California court of appeals held an employment ADR policy void because the employer’s policy contained very specific limitations on discovery, allowing only a single deposition, for example. The court held that this policy so limited the due process that it could not be enforced. On the East coast, however, the United States Court of Appeals for the Fourth Circuit upheld an employment arbitration policy against an employee who could not speak or understand written English. The court held that the employee’s failure to have the document translated, or have someone read it to him, was negligence that did not excuse him for performance of the promise evidenced by his signature.

Another consideration is that these agreements are increasingly coming under scrutiny by Congress. There is a possibility that Congress may outlaw all employment ADR agreements sometime in the next term. However, powerful forces—not the least of which is the AAA itself—are pushing against such a sweeping change.

When I have a potential client come into my office today almost the first question out of my mouth is whether there is an ADR agreement. If the answer is yes, the chances are great that I will not accept that case. We hate the limitations imposed by the rules, because we know that no matter what anyone says about ADR making no difference in justice, the opposite is true. ADR tilts the playing field dramatically in favor of the employer.

In order to make sure you have the right agreement and that your agreement is organic—i.e., can change to conform to the latest court cases—you should not do this on your own. Have good advice and support. We can provide it.

Mike Moore is ranked among the best in employment law and named one of the top 10 lawyers in Ohio. As Director of McKenzie's HRSolutions, Mike is the creator of the Employment Policy and Handbook, geared to providing dentists who are unsophisticated in the legal arena with a step-by-step policy manual.

Click here to hear Mike present “7 Elements of an Effective Employment Policy.”
Email Mike at mike@thedentistsnetwork.net.

Interested in having Mike speak to your dental society or study club? Click here

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Joel Harris, President
ADA Intelligent Dental
Marketing, Inc.
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What Is SEO?

I know that you dentists have a lot of responsibilities that fall outside the realm of marketing and technology. In my case, website design is as important to me as cutting the perfect crown is to most dentists. Hopefully, this short article will give you a basic understanding of one of the most important frontiers in dental marketing today. It's called SEO. If you're confused, keep reading.

Search Engine Optimization (usually called SEO) is the science and sometimes art of optimizing a website to increase traffic from search engines. And, as I've already mentioned, it is a very important aspect of dental marketing. Here's why.

There’s nothing like free traffic to your website. But to get free traffic, you have to first get listed in the search engines and achieve high ranking with the keywords that will drive people to your website. Getting listed is just the first step. Once the search engines know you exist, you must then convince them that you are important enough to be ranked at the very top of their listings. To do this, you must understand how search engines work and how to “negotiate” with them to make them understand, “Hey, I should be at the top of your search listings!”

The majority of web traffic is driven by the major commercial search engines—Yahoo!, MSN, Google and AskJeeves. (Although AOL gets nearly 10% of searches, its engine is powered by Google's results.) If your site cannot be found by search engines or your content cannot be put into their databases, you miss out on the incredible opportunities available to websites provided via search—visits to your site from people who want what you have. Whether your site provides content, services, products or information, search engines are a primary method of navigation for almost all Internet users.

Search engines are always working towards improving their technology to crawl the web more deeply and return increasingly relevant results to users. The online environment is becoming more and more competitive. Dentists who utilize the principles of SEO will have a decided advantage in attracting visitors and new patients. The right moves can net you many visits from prospective patients. The wrong moves can bury your site deep in the search results and make it nearly impossible to find your site with a search engine.

Here are a few suggestions to help you get started:

1. If you don't already have a website, get your own domain name and register it for several years. Spending $50 to register your domain for the next five years is a no-brainer.

2. Get a decent host. For dental websites you can find many reliable hosting options for less than $20 per month.

3. Set up an email address using your domain. Your hosting plan will come with a minimum of one free email address and your host should have instructions on how to set up and configure your mail client to check that email. drjones@westcoastdental.com looks much more professional than molarguy25@yahoo.net.

4. If you don’t know how to develop a great dental website, hire a reputable firm that specializes in dental websites. Remember, your website will make the first impression of your practice on online users.

5. Make sure the titles tags on each page are unique and include some keywords you think people would type into a search engine while trying to find your site. For example, if you practice in Clearwater, Florida, your homepage title tag might be: “Professional Dental Services in Clearwater, Florida—Southshore Dental.” Every page on your site should have a title tag that reflects the content specific to that page.

6. Make sure the meta description tag on each page contains a sentence that serves as a mini-advertisement for your practice that makes people want to find out more. It may appear at times under the title of your website in Google and other search engines. Be sure the description is not only promotional but also informational about your practice and dental services.

7. Make sure the designer doesn’t use flash (for the entire website) or JavaScript links to navigate your site. For a myriad of reasons you don’t care about, I assure you this is very bad if you have any hopes of people finding your website in the search engines.

8. Make sure you have links coming in to as many pages as possible. What does it tell a search engine when other websites are linking to different pages on your site? You obviously have lots of worthwhile content. If all your links are coming in to the home page, this tells the search engines that you have a shallow site of little value, or that your links were generated by automation rather than by the value of your site.

9. Link to articles from local publishers that archive their content. These links often stay live for many years in the archives.

10. A big site needs a site map, which should be linked to from every page on the site. This will help the search engine robots find every page with just two clicks. A small site needs a site map, too. It's called the navigation bar. Make sure the structure of your site is easy for the search engines to analyze and index.

Joel Harris is CEO and Co-Founder of Intelligent Dental Marketing, one of the nation's leading dental marketing companies focused exclusively on dental practices. Intelligent Dental Marketing provides powerful marketing tools to help dentists grow their patient base increase their profit and improve their image. Joel can be reached directly at 877.942.8855.

Interested in speaking to Joel about your marketing concerns? Email him at joel@thedentistsnetwork.net.

Interested in having Joel speak to your dental society or study club? Click here.

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