Transitioning from residency or fellowship into your first attending role is an exciting milestone. After years of training, long hours, and financial sacrifice, receiving a job offer feels like validation. But amid the excitement, many new physicians rush through one of the most important financial and professional decisions of their careers: evaluating their employment contract.

Physician employment agreements are complex legal documents filled with compensation structures, restrictive covenants, productivity metrics, and termination provisions. Missing key details early can affect income, work-life balance, and long-term career mobility. Understanding common mistakes new physicians make can help you protect your future and ensure you receive fair compensation for a new physician entering the workforce.

Mistake #1: Focusing Only on Base Salary

One of the most common missteps is concentrating solely on base salary. While the guaranteed salary number is often the first figure candidates look at, it rarely reflects total compensation.

Many physician contracts include productivity bonuses tied to RVUs, collections, or quality metrics. These formulas can significantly increase — or limit — your actual earnings. Without understanding how these metrics are calculated and whether targets are realistic, it is impossible to determine what you will truly earn.

Additionally, signing bonuses, relocation assistance, retirement contributions, call stipends, and CME allowances all contribute to the full compensation picture. Some bonuses may include repayment obligations if you leave before a certain time period, which can create financial risk.

Evaluating the entire package — not just the headline salary — is critical to understanding whether an offer is competitive and sustainable.

Mistake #2: Overlooking Restrictive Covenants

Non-compete clauses are often buried toward the end of employment agreements, yet they can have lasting consequences.

A restrictive covenant may limit your ability to practice within a specific geographic radius for a defined period after leaving the employer. In some cases, the restriction could prevent you from working within 10, 20, or even 50 miles of your former practice for one to two years.

For physicians with family ties or specialized referral networks, these restrictions can be career-altering. State laws vary regarding enforceability, and the scope of the restriction often can be negotiated.

Ignoring this provision during contract review may significantly limit your future employment options if the position does not work out.

Mistake #3: Not Reviewing Termination Clauses Carefully

Many new physicians assume that once they sign, they will remain in the role long-term. However, understanding how the relationship can end is just as important as how it begins.

Most contracts include both “for cause” and “without cause” termination provisions. A without-cause clause allows either party to end the agreement with notice, often 60 to 90 days. The notice period can impact your ability to transition smoothly to another role.

Another critical issue is malpractice insurance coverage, particularly tail coverage. If the employer provides claims-made malpractice insurance, someone must pay for the extended reporting endorsement (tail) when employment ends. Tail premiums can cost tens of thousands of dollars, and contracts often assign this financial responsibility to the physician.

Without careful review, termination provisions can create unexpected financial burdens.

Mistake #4: Failing to Clarify Workload Expectations

Compensation means little if workload expectations are unclear or unrealistic.

New physicians sometimes overlook details regarding:

• Call frequency and weekend coverage
  
  
• Required administrative duties
  
  
• Productivity minimums
  
  
• Coverage across multiple practice locations
  
  
• Expectations for committee participation or teaching
  
  

Vague contract language such as “as reasonably assigned” may give employers broad discretion to increase responsibilities.

It is important to have clear, written expectations regarding patient volume, support staff, and scheduling. These details affect not only compensation but also burnout risk and work-life balance.

Mistake #5: Assuming the Offer Is Non-Negotiable

A surprising number of new physicians assume employment contracts are presented on a take-it-or-leave-it basis. While some large institutions have standardized templates, many contract terms are negotiable.

Base salary may have limited flexibility, but other provisions often can be adjusted. These include:

• Signing bonuses
  
  
• Relocation assistance
  
  
• CME allowances
  
  
• Non-compete scope
  
  
• Notice periods
  
  
• Tail insurance allocation
  
  

Negotiation does not have to be confrontational. When approached professionally and supported with market data, it demonstrates that you are thoughtful and informed.

Understanding market benchmarks is essential when negotiating for fair compensation for a new physician. Without context, it is difficult to know whether an offer aligns with industry standards for your specialty and geographic region.

Mistake #6: Skipping Independent Contract Review

Perhaps the most significant mistake is failing to obtain an independent legal review.

Employers draft contracts to protect their own interests. That does not mean the agreement is unfair — but it does mean the language is written from the employer’s perspective.

An experienced physician contract lawyer can:

• Clarify ambiguous language
  
  
• Identify financial risks
  
  
• Evaluate non-compete enforceability
  
  
• Assess compensation structures
  
  
• Suggest negotiation strategies
  
  

Early review is far less costly and stressful than resolving disputes later. For physicians beginning their careers, the contract sets the tone for financial growth, job satisfaction, and professional flexibility.

Protecting Your Career From Day One

Your first employment agreement is more than a job offer — it is a foundation. Small details regarding compensation formulas, termination rights, or restrictive covenants can have long-term effects on income and mobility.

Taking the time to carefully evaluate each component of your contract helps ensure you are positioned for success rather than frustration. By avoiding common mistakes and seeking guidance when needed, new physicians can move forward with confidence, knowing they have secured terms that support both their professional goals and personal priorities.

Entering practice is a major milestone. Making informed decisions now can protect your earning potential and career flexibility for years to come.