Understanding and Evaluating Associateship Opportunities
Why Owners May Want an Associate

Course Author(s): David G. Dunning, MA, PhD; Robert D. Madden, DDS, MBA

Why Owners May Want an Associate

Dr. Richard Callan outlines five main reasons a dentist-owner may want to hire an associate:17

  1. being too busy/too much patient demand for service;
  2. planning to retire and/or sell a practice;
  3. wanting to slow down/reduce hours;
  4. having extra available operatories/space; and
  5. fulfilling a desire to mentor. We have divided these five main reasons into two categories: best reasons; and other reasons.

Best Reasons

  1. In spite of lower utilization rates and market pressures on profitability, many successful dentists still report being too busy or having too much demand to meet all their patient treatment needs. Such blessed dentists are obviously in a situation in which they need additional help which an associate should be willing to provide.
  2. Many owner-dentists view a potential associateship as an opportunity to sell their practices and eventually retire. Dr. Steve Wolff serves as a broker and as of this writing a current officer in ADS Group (adstransitions.com), the largest independent dental brokerage firm in the United States. Dr. Wolff calls the associateship-owner retirement transition “the 5% solution,” suggesting such a transition actually succeeds about 5% of the time.18 Whatever the percentage in actual experience, the transition from associate to owner is complicated business. Several sections later in this course address specific reasons that associateships may fail and offer suggestions for successful associateships.

In our opinion, the best reasons create the most optimal situation for a successful associateship, particularly one involving the associate working as an employee vs. an independent contractor—this distinction will be addressed later.

Other Reasons

  1. As dentists advance in age, many may want to slow down or reduce their hours. Doing so creates an opportunity for an associate to fill the gap in dental services. The current average retirement age of dentists is 70 with a projected increase from one source to 75 within the next 5 to 10 years.7 Other people are observing lower retirement ages as practice performance improves along with the general economy. In the end, there may be fewer full-time and more part-time associateship opportunities over time. At least some dentists will be working more years on the one hand; on the other, there may be increasing numbers wanting to slow down or to reduce their chair time.
  2. Some dentists have facility resources which exceed the practitioner’s needs—namely, unused, equipped operatories or perhaps unequipped operatories. This space creates at least a place for a potential associate to practice. Depending on patient demand in the area and the respective goals of an owner and an associate candidate, this space could be utilized by an associate as an employee or, arguably more likely, by an independent contractor-associate who could potentially build a second practice within the same facility. A later section differentiates employment vs. independent contracting in the context of dental associateships.
  3. At least some dentists have a deep and abiding interest to mentor younger dentists. Mentoring and the associated professional collegiality can be a powerful, meaningful experience for both the owner-dentist and associate. Mentoring is infrequently mentioned in associateship agreements/contracts, but should probably be described in writing or at least discussed during the hiring process. Mentoring can embrace clinical, interpersonal and business aspects of practice.

Our view is that the second “other reason”—having excessive facility resources, may lend itself more favorably for an associate working as an independent contractor. In effect, the associate would be building his/her own practice in the same location(s) as the current owner.