purchasing a practice C D A J O U R N A L , V O L 4 9 , Nº 2
Your Dental Future: The Legal Path to Purchasing a Dental Practice Steven D. Barrabee, JD
abstract The dental practice purchase process requires the dentist to utilize the resources of knowledgeable professionals to identify the preferred dental practice, assess its future potential, target the right price, then document the purchase to protect the parties and allow both the buyer and the seller to transition the practice for both their benefits.
AUTHOR Steven D. Barrabee, JD, has represented health care providers in business transactions, entity formations, lease negotiations, business and malpractice litigation for over 35 years. Over the last decade, he has lectured on dental business law matters at the University of the Pacific and the University of California, San Francisco, Dental Schools, made presentations to local and state dental societies and published on legal issues in dentistry. Conflict of Interest Disclosure: None reported.
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or most dentists, their professional path begins with learning the craft of dentistry in dental school followed by the introduction to their profession as an associate in a dental practice either operated by an individual practitioner or, as is becoming more common, a multi-office dental enterprise. As an associate, a dentist will likely learn the skills necessary to work in private practice including the art of diagnosis, treatment planning, patient communication, rendering of treatment and management of treatment outcomes including complications. An associate dentist is commonly responsible for managing patients but not the responsibility to own and operate a small business. The associate, whether an employee or independent contractor, does not control their own dental destiny. The dental practice owner makes decisions for the practice that determine the patients to be treated, the days of work, the insurance plans accepted, the staff who provide assistance and the nature and extent of the associate’s compensation. Formerly, most dentists desired to be their own boss and the ultimate goal was to purchase
their own practice. While that is not currently true for all dentists, for those dentists who have the entrepreneurial desire, the decisions made in a dental practice purchase will have a far-reaching impact on their ultimate professional fulfillment and financial success.
A Team Approach to the Purchase of Your Practice
To meet their goals and protect themselves from common pitfalls in the dental practice purchase process, the purchasing dentist must undertake a systematic approach to the practice purchase process. A successful dental practice purchase should not be an individual endeavor. A wise dentist will be the leader of a team of knowledgeable consultants who can assist in identifying the appropriate practice to purchase, undertaking the proper analysis of the practice to determine if it is the right practice to purchase followed by proper documentation to ensure they obtain the benefit of their purchase. Much like the decision to buy a house, the first consideration is the location of the dental practice. While it is FEBRUARY 2 0 2 1
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