For many new dentists, the first job offer after graduation comes from a dental service organization (DSO), and it often arrives with real pressure to sign quickly. Student debt is mounting, licensing is fresh, and the offer on the table can look generous at first glance.
But dental school rarely trains new graduates to read a legal contract, and DSO agreements are drafted by attorneys who represent the organization, not the associate. Understanding a handful of frequently overlooked clauses can mean the difference between a smooth first chapter of practice and years of frustration.
Here are three provisions that deserve careful attention before any signature goes on the page.
Restrictive covenants
Marshall Strisik.
Nearly every DSO associate agreement contains some version of a noncompete or nonsolicitation clause, and new graduates tend to skim right past it. The instinct is understandable -- the job hasn't even started, so a restriction on leaving feels irrelevant. But these clauses define what happens after the relationship ends, and they can quietly limit where a dentist is allowed to practice for years afterward.
The details matter enormously. A noncompete radius of five miles in a dense urban market is a very different restriction than five miles in a rural county where patients may need to drive well beyond that to find another provider.
The duration also varies widely, from one year to indefinite in poorly drafted agreements. Associates should also look closely at whether the covenant is triggered only by a voluntary resignation or whether it also applies if the associate is terminated without cause -- a distinction many contracts blur intentionally.
Before signing, a new graduate should map the covenant's radius against the actual practices in the area and ask a straightforward question: If this job doesn't work out, where would I legally be permitted to practice, and is that acceptable?
If the answer isn't clear from reading the contract alone, it's worth having someone explain it in plain terms before moving forward.
Termination provisions
Termination clauses are often the most one-sided section of a DSO agreement, and they're frequently glossed over because nobody wants to think about an employment relationship ending before it begins. That's precisely why they deserve scrutiny.
A common pattern is an agreement that allows the DSO to terminate the associate without cause on relatively short notice -- sometimes as little as 30 days -- while requiring the associate to give substantially longer notice, or forfeit certain compensation, if they want to leave.
Some agreements also tie termination to production thresholds that aren't clearly defined, giving the organization broad discretion to end the relationship if numbers dip for reasons entirely outside the associate's control, such as a slow patient ramp-up or a temporary staffing shortage at the office.
Equally important is what happens financially at termination. Does the associate lose unpaid bonus compensation that was otherwise earned? Is there a repayment obligation for a signing bonus or relocation assistance if the associate leaves before a certain date? These "clawback" provisions are common and can turn what looked like a generous signing incentive into an unexpected bill.
New graduates should ask for the termination and clawback sections to be walked through line by line, with specific dollar consequences spelled out for different scenarios -- resignation, termination without cause, and termination for cause.
Productivity-based compensation formulas
Many DSO offers are structured around a base salary plus a production or collections-based bonus, and the marketing pitch is often simple: work hard, earn more. In practice, the formulas behind these arrangements can be genuinely complicated, and small differences in wording can produce very different paychecks.
New graduates should look closely at what the bonus is actually calculated on. Is it gross production or collections net of adjustments and write-offs? Are lab fees, supply costs, or a share of overhead deducted from the associate's number before the bonus percentage is applied?
Some formulas layer in a minimum production threshold before any bonus accrues at all, meaning a slower first year -- typical for someone building a patient base -- could result in months of base salary only, with no additional compensation despite real clinical work being performed.
It's also worth asking how often the formula is recalculated or subject to change and whether the DSO has unilateral discretion to adjust fee schedules, insurance participation, or overhead allocations in a way that affects the bonus calculation without the associate's agreement. A formula that looks favorable on day one can shift substantially if the underlying inputs aren't fixed for the term of the agreement.
The bottom line
None of these clauses are necessarily deal-breakers on their own, and DSOs are not inherently adversarial employers -- many offer real advantages for new graduates, including mentorship, established patient bases, and administrative support that a solo startup practice can't match.
The goal isn't to view every DSO contract with suspicion, but to read the full agreement, understand exactly what each of these provisions means in practical terms, and ask questions before signing rather than after a problem arises. A short conversation with someone who reviews these contracts regularly, before an offer is accepted, is almost always less costly than untangling a restrictive covenant or a clawback dispute after the fact.
Marshall Strisik is the founder of DentalContractsPro.com. He is a healthcare attorney and consultant with two decades of experience advising dentists through DSO acquisitions and practice transitions. Marshall routinely works with new graduates on their first employment agreements.
The comments and observations expressed herein do not necessarily reflect the opinions of DrBicuspid.com, nor should they be construed as an endorsement or admonishment of any particular idea, vendor, or organization.
