Before you set up shop in a new practice setting, you may need to take an important first step: negotiating an employment contract. Although many NPs have practiced without employment contracts, making it official can offer you more protection and advantages than an informal employment arrangement can. And in some cases, the idea might be introduced by your potential employer.

"The contract eliminates a lot of confusion by specifying each party's expectations," explained Melanie L. Balestra, NP, owner of a law practice in Irvine, Calif. "The majority of NPs do not have contracts, but I am seeing more and more who do. If you can start using one right out of school, it becomes natural to build on it as you move to other jobs."

The process of negotiating a contract can seem intimidating, but a few basic guidelines can help. By mapping out what you want from the employment relationship and keeping in mind what you truly need, you can structure a deal based on the terms beneficial to you.

This involves some research. First, you need to prioritize what you want and what you need (with a general understanding of what you are and are not willing to give up). Next, you need to figure out what you have to offer your employer. Then determine what your employer wants. And finally, come to some general conclusions about how you can connect the two in negotiations.

An abbreviated employment contract is shown below, along with some expert tips from employment lawyers. Not included are details you may want to include in your contract, such as hours, on-call requirements, staff support and specific benefits like holidays, vacation time, insurance and reimbursement for continuing education.

Keep in mind there is no "one size fits all" solution to building your contract - it needs to be tailored to your specific situation. Consider our sample as a general guideline.

NP Employment Contract Example

TERMS OF EMPLOYMENT

DURATION
The contract duration is for 1 year with option for renewal for 5 years thereafter.

COMPENSATION
Salary:

The contracted position will be paid at a salary rate of $_________ per year.

The contract will be renewed the sixth month after review of the employee's performance.

Paychecks will be issued biweekly.

Here you can choose a straight salary, an hourly rate or a percentage of net receipts (earnings based on your productivity).

Past productivity numbers, or revenue projections for new NPs, will strengthen your case regardless of which salary scenario you choose. "No matter what line of work you're in, if you can demonstrate specifically how you contribute to the bottom line, you can persuade employers or business partners that there is a financial 'win-win' to working with you," said Harry Nelson, an employment lawyer with Fenton & Nelson, LLP, in Los Angeles.

Be ready to explain that productivity numbers don't provide the whole picture, since some of what you do may not be recognized from an economic standpoint.

"Your value is more than those revenue numbers," explained Michael F. Schaff, a member of the American Healthcare Lawyer Association's board of directors and chairman of the corporate and health care departments for Wilentz Goldman & Spitzer in Woodbridge, N.J. "There are parts of your NP role that are not reimbursable, yet you're doing things that increase the employer's bottom line indirectly or cut costs, [because] they would need to hire someone else to handle those administrative duties."

Where you stand in relation to other applicants for the job is also related to how much wiggle room you have with salary negotiations. Don't be afraid to ask whether there are other applicants and where you stand in relation to them. If you find that your potential employer is falling short of your "must-have" salary range, consider asking for more paid time off, adding performance-based productivity incentives (profit sharing) or allowances for you to schedule work elsewhere to supplement your compensation.

"There are other possibilities, such as collection-based incentives or stock ownership, but NPs may encounter resistance from more conservative employers who aren't sure how to deal with a more entrepreneurial NP," Nelson said.

BONUSES:
The consideration of a bonus will be determined yearly based on the assessment of the productivity, performance review and financial status of the corporation. There will be no guarantee of bonus payment, but the corporation maintains the philosophy that the value of an employee must be assessed and the reward for the production of a job well done should be recognized with a financial reward.

This language offers a vague plan for bonuses, one of the biggest pitfalls of negotiating this area. "The most important criteria for bonuses are that they include a specific formula to make them more objective," Schaff said. "There are a number of things you can look at for that formula: patient visits, patient satisfaction, collections, billings, hours worked. You can create almost anything; just look at your own situation and from that, figure out what you can do."

So keep an eye out for vague bonus language - clarity can eliminate disagreements and disappointments down the line. You should see specifics related to when bonuses will be paid and whether the formula for the bonus is based on productivity, quality, profit or patient satisfaction.

"It's also essential to ensure that evidence-based decision making and patient care are not compromised in pursuit of generating revenue to earn a productivity bonus," Nelson added. "We occasionally include bonuses tied to pursuit of continuing education or other incentives (quality of care) for desired outcomes."