Should I hire an associate to purchase my periodontal practice?

By Bob Septak, MBA
UPBA President & Broker

The path from Associate to Owner is often considered the “gold standard” for practice transition. It offers a structured exit and ensures continuity of care. But for the practice owner, it’s a decision fraught with legal complexity and emotional investment.

Before you start the search, you must be honest about your practice’s readiness and your transition timeline.

Practice Readiness & Size

Your periodontal practice needs to be large enough to comfortably support two fully productive doctors—especially given the high overhead inherent in a specialist surgical practice (equipment, staff salaries, materials).

• Is your current patient volume and referral base sufficient to prevent the associate from taking production away from you?

• Do you have the necessary operational efficiency (e.g., sterilization, front office) to handle the increased patient flow?

The Purchase Agreement: Critical Details

The transition from associate to buyer hinges entirely on the strength and specificity of the initial agreement. Leaving any detail vague is an invitation for future disagreement.

• Options: Does the associate have an option to purchase the practice? Or do you, the owner, have an option to sell it to them?

• Valuation: At what price will the practice be sold? How is that price determined (e.g., trailing 3 years of collections)? What is the dispute resolution mechanism if you and the associate disagree on the final value?

• Commitment: Can you, the owner, change your mind and decide not to sell to that associate, even after they’ve joined the team?

Timeline

The length of your transition period fundamentally changes the type of contract you need:

• Short Term (6-24 Months): You are primarily looking for a Buyer. The associate phase is a vetting process. An immediate focus on the purchase agreement is crucial.

• Long Term (4-5+ Years): You are simply looking for an Associate right now. The purchase option should be structured with more flexibility and milestones.

Risks

What if this transition doesn’t work out?

• What if the associate decides not to exercise their option after you’ve spent significant time, money, and energy integrating them?

• Do you really want to repeat the entire process with a new candidate?

Strategic Alternatives

Ensuring this is the best option for maximizing your return.

• Market Testing: Might there be a better deal if you opened things up and had the practice professionally marketed? (As we covered in Topic #2: One Buyer Is No Buyer.)

• Forcing the Sale: Can you legally force the associate to purchase your practice? (Spoiler: No, not without an ironclad, well-negotiated contract!)

Bottom Line: Structure Protects Value

Hiring an associate with the intent to purchase can be an effective way to secure a qualified buyer who understands the nuances of your periodontal practice. However, it only works if both the owner and the associate know exactly what to expect, and every detail—from production benchmarks to the final purchase price formula—is meticulously documented.