Inside Dentistry
February 2013
Volume 9, Issue 2

Practice Transition: Can You Afford An Associate?

Follow these five steps before making your decision.

By Roger P. Levin, DDS

One of the most frequent questions asked by dentists is whether their practice is ready for an associate or partner. This has become a much more complex question in recent years due to the impact of what the author terms “permanent game changers,” which include the “Great Recession,” changes in consumer purchasing habits, and decreases in insurance reimbursements, to name a few.

These game changers have resulted in production declines for 75% of dental practices during the last 3 years, according to the Levin Group Data Center™.1 Without sufficient production, practices are obviously not in the best position to hire an associate.

The Practice Cycle

In previous decades, practices used to operate in fairly predictable cycles over the course of a dental career. Levin Group has identified these phases as:

1. Start-Up—the first few years of owning a practice
2. Growth—the period during which the dentist becomes known in the community, and the practice takes off as a business
3. Maturity—the period during which a firmly established practice enjoys sustainable growth year after year
4. Decline—when the practice stops growing as a result of outdated systems

Until 4 years ago, few practices actually entered the decline stage, which typically occurred when the dentist was slowing down and preparing for retirement. Today, the traditional practice career cycle has shifted dramatically, with the majority of practices in decline. This means that the number of doctors who can afford to bring associates on board has greatly diminished.

Five Steps to Take Before Hiring an Associate

An associate can be a valuable asset when the practice is growing or the doctor is considering retirement in the near future. These five essential steps will help dentists ensure that a decision to hire an associate is the right one:

Step 1—Conduct a Practice Analysis

Consider the following questions: What are the practice’s strengths, weaknesses, opportunities, and threats? What are the trends for practice production, number of new patients, average production per patient of record and per new patient? Has there been positive growth for the past 3 years?

Levin Group regularly analyzes practices and finds that most offices have the potential to grow substantially with just one doctor in place. The biggest impediment to growth is the lack of high-performance management and marketing systems.


Step 2—Review Financial Status

Hiring an associate is determined by the owner’s financial well-being. If the dentist is struggling financially, it does not make sense to bring on another high-salaried employee. A financially secure doctor who has little debt, extensive savings, and a strong investment portfolio is obviously in a much better position to hire an associate. Expert financial guidance will help the owner to determine whether or not the associateship makes sense.

Step 3—Consider Team Dynamics

The owner needs to carefully prepare the team for the addition of the associate. If the team is not fully accepting of the new doctor, stress and chaos usually follow. The doctor’s attitude and demeanor toward the new associate has a major impact on the team’s behavior.


Step 4—Have a Practice Valuation Performed

Many dentists would like to skip this step because it involves paying a fee, but a valuation should be viewed as a necessity before hiring an associate. By receiving a comprehensive valuation of the practice, the owner will have objective information to use in determining whether the practice can afford an associate, has the potential to grow without an associate, and what the potential would be with the associate. In addition, it is important to know the value of the practice when the associate joins the office, in case this arrangement ultimately leads to a partnership.

Step 5—Make It Legal

The practice and the associate should enter into an employment contract. Practices that bring an associate on board without a legal agreement may end up with severe problems such as the associate leaving with patients and staff. It is critical to always have a legal agreement with an associate, and this contract should be drawn up by an attorney who is experienced in dental practice agreements.


The question of whether the practice should add an associate or partner is complex. For the doctor owner, hiring an associate must make sense in the areas of practice growth, personal finance, team dynamics, and practice valuation. In addition, any decision to hire an associate must be bound by a written legal agreement reviewed by an attorney with an extensive background in dentistry.


1Levin Group Data Center™ houses proprietary data collected annually from thousands of dental practices, including clients and other dentists worldwide.

About the Author

Roger P. Levin, DDS | Dr. Levin is the CEO of Levin Group, Owings Mill, Maryland. To learn how to run a more profitable, efficient and satisfying practice, visit the Levin Group Resource Center at www.levingroup.com/gp—a free online resource with tips, videos, and other valuable information. You can also connect with Levin Group on Facebook and Twitter (@Levin_Group) for learning strategies and sharing ideas.

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