A guide to advisory service agreements

Job turnover is on the rise among physicians because their desire for flexibility and work-life balance is emboldening them to leave jobs where they feel overworked or underappreciated, according to a new report. It found that 43% of physicians switched jobs during the pandemic, 8% retired, and 3% left medicine to work in a non-clinical career.

If you are interested in getting a non-clinical job or engagement or want to be a compensated connector, you should execute an advisory service agreement before starting your new gig.

A business advisory agreement is a legal contract between a company and an external advisor. The purpose of the agreement is to establish the relationship, define each party's responsibilities and obligations, outline compensation, and address potential termination scenarios.

A business advisory agreement should contain all material terms such as compensation rates, scope of work, duration of engagement and payment schedule. This will provide clarity on who does what and when they are paid for it.

Advisors are a common hire for businesses, so it is important to make sure you set the relationship up for success with a solid contract.

Here is an overview and sample templates for an advisory services agreement.

Pay particular attention to:

1. Non-compete clauses. The FTC wants to ban them and in many states, they are not enforceable.
2. Confidentiality clauses that you require you to keep things to yourself for prolonged periods of time, like 10 years
3. Liability
4. Compensation terms and conditions
5. Termination notifications
6. Governing law and jurisdictions

You did not go to CMO school during your medical education, so here are some things to think about when you are executing your advisory services agreement.

Keep in mind that:

• advising is not doctoring,
• the clinical mindset is similar and different in many ways from the entrepreneurial mindset,
• how and how much you get paid to take care of patients is different from non-clinical compensation schemes
• you need to bring the right tools and instruments to the job
• avoid these sick care side gig gaffes

Be sure you understand and agree with the parts of your advisory service agreement before you sign it.

Arlen Meyers, MD, MBA is the President and CEO of the Society of Physician Entrepreneurs

Updated 5/2023