Are you thinking of purchasing a dental practice? Congrats! One of many decisions you will need to make is whether to hire an attorney to assist you in the process. Here are three reasons you should not go through this process without an attorney:
I. TO PROTECT YOU
An attorney will help protect you, your future practice, and your personal assets.
Lawsuits usually result from poor contract drafting or parties not understanding their contractual obligations. General contracts found on the internet or taken from another dentist’s transition will usually fail to take into consideration specific terms that relate to you and your transition. An attorney will ensure that you understand exactly what is asked of you in a contract before you sign or agree to anything.
Additionally, how your business is structured matters. If it’s done incorrectly, you could be exposed to hundreds of thousands of dollars in liability. If creditors come after your business, your personal assets could be at risk if your business is not set up properly. Hiring an attorney to set up your business entity correctly will not only save you time, energy, and money now, but it could be the key to protecting your practice and personal assets in the future.
II. TO CORRECT MISCONCEPTIONS
An experienced dental transition attorney can help correct any misconceptions you might have – because sometimes the process is more complicated than you anticipated.
Frankly, you don’t know what you don’t know. Transitions can become complicated, aren’t always straight-forward despite your relationship with the seller, and they take experienced negotiation to ensure your individual interests are considered. An attorney who has handled hundreds of transitions will know how to navigate the complicated waters of a deal.
Dentists often come to us saying, “My friend who just purchased a practice just did XYZ” or “My dad told me to make sure I do ABC.” That’s so kind of your friends and family to give you advice. But they also don’t know what they don’t know. Your friend could be practicing in another state. Their deal could have been completely different (i.e., you might be leasing the building, but they purchased the real estate). Maybe your friend didn’t hire an attorney and their deal was done incorrectly. Is your dad a dental transition attorney? If not, listen to his advice, sure, but also consult with an attorney about it too.
Some buyers don’t hire an attorney because they believe having a CPA, accountant, broker, or consultant will be enough. But these professionals aren’t attorneys (unless they are). A CPA may not understand how to draft or interpret a contract or set up your business entity to make sure your assets are protected. The presence of a broker on a deal is fine. But remember, their main goal is to push the transition through and make a commission from the seller. They are not required to work to serve the buyer’s interest.
Non-attorney professionals can be helpful in your transition, but they are not always aware of legal red flags or aspects of a transition that may affect you in the future.
III. TO MANAGE YOUR DEAL FOR YOU
The dental transition process is time consuming and can be stressful. A dental transition can take an attorney anywhere from 15 to 50 hours of time from engagement to closing. It also requires a lot of negotiation and communication. If you’re a practicing dentist, you’re likely working a lot of hours already, and it would be an enormous undertaking to add even more hours and obligations to your plate.
An attorney will help manage your deal, negotiate aspects that with your wants and needs, and make sure it’s done as efficiently as possible to get you across the finish line in a time frame that works for you and the seller. Although it costs money upfront, it could end up saving you hundreds of thousands of dollars down the road – not to mention saving you time, energy, and potential headaches years from now.
Hiring an attorney with years of experience helping dentists with dental transitions should be a no-brainer. For a free consultation, contact us today.