Failing to Plan Is Planning to Fail

In today's episode, John describes how to address 3 big issues when leaving your current employer for a nontraditional career.

The whole process can be less disruptive and stressful by taking steps to address them proactively.

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Address 3 Big Issues

There are major financial, legal, and emotional issues that can complicate your transition.

And it is essential to take these matters into account early on in the process. If we consider and deal with things sooner rather than later, things will go better. 

Review Your Contract

Legal or contractual issues will come up during the transition. These contract-related matters should be discussed with your lawyer so that you can prepare for them. The most common concerns that arise include the following:

  1. notification requirements,
  2. tail coverage,
  3. bonus eligibility or calculations,
  4. effect on retirement plan vesting, and
  5. non-compete provisions (restrictive covenants).

Consider Your Financial Situation

This is usually the most obvious area of concern. Questions to address include:

  • Do I have alternative financial resources to cover expenses if I leave my current job?
  • Can I ramp up a side job or passive income source to cover expenses?
  • Do I have vacation time (paid time off or “PTO”) that I can accrue to maintain my salary for a few weeks or months?

Prepare for the Emotional Consequences

This is a significant one that we frequently overlook: the psychological effects your transition will have on you, your family, and others close to you.

  1. Changing jobs results in potentially enormous stress on us, similar to that associated with getting married or having a child.
  2. Your immediate family members will be affected and will have concerns about the potential consequences of your career change on them.
  3. The workplace will be affected, especially if it depends heavily on you for patient care call coverage.  Dysfunctional medical groups in particular don't always conduct themselves professionally during this process. Some coworkers will display one or more Kübler-Ross' five stages of grief. 

John's Advice

  1. Review these issues and plan for them as early in your transition process as possible.
  2. Communicate openly and often with your immediate family.
  3. Use an attorney to anticipate and plan for the legal and contractual issues.


It is imperative to address 3 big issues when approaching a career transition. Recognizing and preparing early for these issues will reduce the negative legal, financial, and emotional consequences that might arise.

NOTE: Look below for a transcript of today's episode. 

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Transcription PNC Podcast Episode 282

You Must Address 3 Big Issues Before Leaving Your Clinical Job

John: We have issues with financial problems, legal problems, and emotional problems. And these sometimes are not anticipated. As my colleagues and my friends and students and mentees and so forth, are in the process of transitioning from a clinical to a nonclinical job, these things come up and they're unexpected and they cause some serious problems sometimes. It can even derail the job transition. We want to think about these things early in the process. And in fact, the earlier we think about them and the earlier we investigate them and address them, the better off things will be. So, without any question, this kind of conversation, whether it's with advisors or with our spouse, should occur early.

What are the issues that come up? The first ones I want to talk about are contractual issues, or you might call them legal issues. They're things that are usually in your employment contract. This is obviously applicable to those who work for a large group or work for a hospital system. And there are several of these that can really throw a monkey wrench into the whole process. Now, some of the contractual issues also affect financial issues, and we'll kind of talk about that overlap in a minute. But let's just talk about some of those contractual issues.

The first thing, in no particular order, is the required notification. Sometimes we get all excited. We think, "Okay I'm really having a hard time. I'm going to take some vacation. I'm going to investigate moving into a nonclinical job. I'm going to apply to a nonclinical job." And then boom, lo and behold, they hire you. Now it usually takes longer than just a few weeks. Well, let's say they offer you a job, then you look at your contract and you find out that you actually have to give six months' notice. That's going to really cause a problem, obviously, if they're expecting you to show up in two or three weeks, even a month or two, which is pretty typical.

So, you need to look at your contract and see what your notification time is and if there are any exceptions to that. And if you are in a big hurry, are there some workarounds for that? One workaround might be, let's say you have a bunch of vacation, and let's say you really haven't taken any vacation in a couple of years and you've accrued six or eight weeks of vacation. Well, you can at least work every day until the time you want to leave. And then potentially you can actually get paid for six or eight weeks, even though you've moved on to the next job.

The second thing is tail coverage. A lot of us don't worry about that, and a lot of our contracts don't have that as a requirement, but there are still some places that want you to pay tail coverage if you leave your group or your hospital. And that could be a big expense. That can be $20,000, $30,000, $50,000, or $100,000, and you might be obligated in your contract and maybe even in a hospital medical staff rules and regs to pay that tail coverage at the time of your leaving. And that might just be a huge financial as well as a contractual issue.

Now, it's a big pet peeve of mine. If you're listening to this and you're in the middle of contracting, or you're re-contracting for a current job or looking at a new clinical job, you should really try and get any of your tail coverage removed from the contract. But it can't always be done. So, you need to minimize it during the contract negotiation. But now you're faced with this issue, you want to leave and you're going to have to pay tail. So, you got to check with your attorney. Is it enforceable? In some states it's illegal. So, if it's in that contract, it shouldn't be. Look at how long it is, what does it include, and is there time to change it?

Let's say you're coming up for a contract renewal. Maybe you're on a yearly basis, and you might be able to change a few things. So, you definitely want to look at that tail coverage early as you're thinking about this process of leaving your job. What about vacation and PTO? That's paid time off (vacation). Same thing. Do you have any accrued already? Are you continuing to accrue it while you're thinking about leaving and while you're getting ready to leave for another job? Can you save it up so that you can address some of the other issues we're going to talk about in terms of having some income later? Or do you have to use it up before you leave and you somehow lose some of that PTO time? Is it somewhat at risk? Again, look at the contract, and how it talks about vacation and PTO, and be prepared to deal with that before you give notice.

What about bonuses? A lot of us have been on bonuses in our job. Quality bonuses, utilization bonuses, whatever. There are all kinds of bonuses. There's a dollar amount. Are they paid only once per year? Maybe after the first of the year for the previous year's activity? What happens if you leave three months before the end of the year or mid-year or whenever? So, you might actually want to time your looking, finding and leaving for that next job towards November, or December so you could actually leave after the first of the year and get a hundred percent of any bonus that you are supposed to be receiving.

Another one is retirement plans. Most of us have something straightforward like an IRA, a 401(k), or 403(b), something that can be rolled over. But if you're a highly compensated physician, you might be in a deferred comp plan. A deferred comp plan is usually more of a positive way to encourage you to stay in your job as opposed to a negative penalizing you.

But with many of those kinds of programs, you'll vest over time. Some you'll lose part of the money that you've paid into it. It's actually not your money, it's the organization's money, that they've paid into it. So, see if you can capture the majority of that money based on the timing when you leave or you're going to lose the whole thing.

There are even some plans where the whole thing is at risk unless you retire from the organization, let's say at age 63 or 65 or something. You could be looking at losing $200,000, $300,000, $400,000 because you're changing to another job. You can at least take that into consideration in terms of a bonus for the person or the company that's hiring you or do something else to mitigate it. But you at least want to know that because it will affect the second big issue, which is financial, which we'll talk about in a minute.

And then you've got your non-compete, or what we call restrictive covenants in your agreements. Do you have to understand how long do they stay in effect? How far is it addressing your employment? How far from your current location? Is it from the place you actually provided care? Is it from any site in the system you might be in? You might be working 30 miles from another site and then end up finding out that you can't do any clinical and you might want to do clinical part-time and you might want to do clinical like a switch to locums or telemedicine, something that's not as intense.

But if you have a non-compete and you can't do some of that, that's going to, again, impact more the financial side, which is the next part where we're going to talk about. But it is a contractual issue. So, it has to be dealt with.

I'll say right here, after talking about these contract-related issues that you should have your attorney go through these with you. Look at each one, tell the attorney your plans and see how these things might affect me. Are some of them no longer enforceable either because of changes to the law or maybe because you're already in breach of contract? Not from your standpoint, but the organization you work for might be in breach of contract.

Now usually there are provisions to say, "Well, if they breach one part, that doesn't mean the whole contract is void." But let's say that you were told that you were going to have every four-day call, every fourth week, however, it's laid out. And it turned out they lost a couple of people. They failed to use locums. And now you've been on every other night or every other week call for a year or two, and that's actually why you're leaving. It may be possible to say, "Look, you breached your responsibility so now I'm not going to listen to this non-compete, or I'm not going to abide by this non-compete, or for that manner, I'm not going to pay the tail coverage" going back to that issue from earlier.

But if you're going to do that, that has to be planned also. You probably can't claim breach of contract unless you give your employer some notice like, "I don't plan to re-up my contract because for the last year, you've been violating your contract in this way." And then there's a process, and you went through the notification process. So, on your end, you're doing everything properly. Those are some of the contractual issues you should deal with.

Next is the financial issues. I already talked about the loss of the deferred comp plan. So, we're not going to go into that again. But if you're going to be moving and there's going to be a gap between the time you finish your current job and start your next job, maybe you're going to be looking during that time, maybe you want to have that time to really focus on it and do the interviews and so forth. But do you have the savings to cover your expenses? Maybe you have a spouse who's employed and or a partner, and that's fine. You can get some support from that person. And maybe the two of you put a huge amount of your income aside generally for retirement and so forth, 20%, 25%.

Well, the other thing you can do during that period is to stop making those contributions. But you should plan it. That's the whole point. Do you have a nonclinical side gig right now that you can ramp up? Maybe it won't cover all of your income, but it'll cover enough that it becomes a non-issue.

And then as I said earlier, the converse of using the PTO, let's say up, because you don't want to lose it if you have the ability to accrue it and if you've gone a couple of years without taking any vacation, and now you can go let's say 4, 6, 8 weeks where you're still receiving your pay. Because technically, even though you're looking for that next job, you're actually still getting your check every two weeks because you are on a salary and you have that many weeks of paid time off, then that can help.

Again, look at the income, look at what you need to do to prepare, and make sure you've got enough money set aside if that's what you're going to depend on, or that you have other sources of income. And don't let that become a big shock halfway through your career transition and something falls through, or you find out you're going to be unemployed for longer than you thought you were.

Finally, the emotional consequences. This is a big one and we also forget about quite a lot. I mean the emotional consequences on you, on your family, and relative to the workplace where you are now. I guess the way I would look at this one is to look at it from the perspective of where the stress on you is coming from. So, the first big thing is you, how anxious are you? What does it feel like to you to let's say go several weeks without some income or several months without income, or go through a series of interviews and being evaluated and assessed and questioned? You might not be used to that. Do you feel like you're in control of the process or do you feel quite anxious and fearful because it's unknown?

Each of us is a little different on that. Now, most of us physicians are very decisive. We're very calm. We usually can do very good research and we can plan things out pretty well. But transitioning from clinical to nonclinical is not quite the same kind of linear approach. It can be broken down into steps absolutely as I help people do. But it's not quite as straightforward as going to undergrad, getting into med school, getting in residency, and then getting into fellowship, if you do that, and knowing the steps well in advance as to what has to happen, and it's all pretty regimented.

But then there's your family's response. Your spouse clearly needs to be included in these conversations, spouse, partner, whoever you're living with. And the thing about children. I had someone tell me recently that he was concerned that his children would be afraid if he's looking and switching to a new job. Would they have to move, would they have to change schools? If you have a six-month hold at home and that's it, it's not a big deal. If you have a couple of kids in grammar school and high school, it can become a big deal for them, and then they can act out, they can have emotional problems, and stress related to even thinking about it, even if it's not going to happen. So, you have to figure out how to have those conversations.

The other thing is what is the employer's response? You go through the contract, you give your notice appropriately, and it sounds like it should be fairly straightforward. But when I've talked to physicians that have gone through this process, especially in large medical groups, especially large poorly run or dysfunctional medical groups, how are they going to act?

And they don't always act professionally during this process. In fact, many are extremely dysfunctional and some seem to be going through the Kubler-Ross five stages of grief or death and dying. The denial, the anger, the bargaining, depression, and acceptance. Acceptance doesn't come right away. And people might ignore you. They might shun you. They might try to dump on you all the work. They get angry, they don't want to talk to you, and they don't want to cooperate with you. They might start giving you more call than they should. And maybe that's something you should address with them early on.

So, think about the emotional and mental health-related issues that could occur in the process of making a big change. Maybe even working 10, or 20 years in a stable clinical job. You're burned out, you've had it, and you're already stressed out. Of course, with burnout, you have symptoms very similar sometimes to depression or anxiety. And now you're going through a major life change that can affect not only you but your family.

And so, again, mentally prepare yourself for that. You can do things. I could give you a long list of things you could do that would help like learning how to meditate and how to maintain some exercise and fitness while you're going through this process to burn off some of that anxiety. The things you normally would probably use to help fight burnout or depression or anxiety you would also use when going through this process.

The other big things that I would say related to these potential issues that you should address is the following. Number one, start early. The earlier you start thinking about it, talking about it, investigating it, researching it, and engaging who you need to engage, the better. So, start early on that part, on the legal part, on the financial, all of it.

Number two, communicate extensively with your family especially. Talk to your partner about this and plan it out together. And make sure that your partner, your spouse, and your kids have some understanding of what's happening. Try not to overwhelm them, try not to scare them unnecessarily. Just communicating constantly helps. Over-communicating is also something we tell leaders to do but it's important. People don't really always get the message the first time you give it.

So, start early, and communicate extensively with your family. And then the last is to get the expert advice that you need. As I say, from the legal financial side, you need an attorney. Maybe it's the same attorney that helped you negotiate your contract, but somebody that knows healthcare, somebody that knows employment contracts, looks through all those issues that I've mentioned. There are probably others that should be addressed proactively, should be prepared for, or should at least be understood so that you are not shocked when something crazy happens like you get a bill for tail coverage or you find out you can't do that part-time clinical job a mile down the road.

But also, others. Maybe you should see a counselor or a therapist if you have to, to help work through some of these things, at least the emotional side, especially. Maybe a coach. That can be very helpful. And possibly even a financial advisor, or an accountant wouldn't hurt. If you're seeing an account anyway for your income taxes, well, why not just do an extra one-hour visit? Explain what you're planning to do and see if they can sign off on it from the standpoint of the financial consequences of your plan.

I think that's it. I just wanted you to be aware of those issues. If you're getting a little burned out, if you're really in the pre-contemplative moving into the contemplative stage of "I might actually want to move to a nonclinical job", then you should start thinking about these issues and including these issues in your whole planning process.

All right, that's it for today's episode. I hope you found that helpful.


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