Author: Richmond Cariaga

Understanding Non-Compete and Non-Solicitation Clauses in Veterinary Contracts

Posted on

Contracts are a vital part of running any veterinary practice. Whether you’re hiring associate veterinarians, forming a partnership, or selling your business, it’s common for contracts to include non-compete and non-solicitation clauses. These provisions are designed to protect the practice’s goodwill, client base, and staff relationships, but they must be carefully drafted and understood to be enforceable and fair.

At Mahan Law, we work with veterinarians across the country to draft, review, and enforce contracts that protect their practices without creating unnecessary legal risks. Here’s what every veterinary professional should know about non-compete and non-solicitation clauses.

What Is a Non-Compete Clause?

A non-compete clause is a contract provision that restricts one party, often an employee or former business partner, from starting or working for a competing veterinary practice within a particular geographic area and time period.

In the veterinary industry, non-competes are often used in:

  • Associate veterinarian employment agreements
  • Partnership or shareholder agreements
  • Practice sale agreements

The goal is to prevent someone who has developed relationships with clients, employees, or referral partners from using that access to open or join a competing practice nearby.

Are Non-Compete Clauses Enforceable?

Enforceability depends on your state’s laws and the reasonableness of the clause. Some states severely limit or even ban non-compete agreements in employment contexts, while others allow them if certain conditions are met.

Generally, a non-compete must be:

  • Reasonable in scope: It should only cover services the individual actually performed.
  • Limited in geographic area: It should be narrowly tailored to the practice’s client base and market.
  • Limited in duration: Most enforceable non-competes last between six months and two years.
  • Protecting legitimate business interests: This could include confidential information, client relationships, or goodwill from a sale.

Courts are less likely to enforce overly broad restrictions that would prevent someone from earning a living or are not tied to a genuine business interest.

What Is a Non-Solicitation Clause?

A non-solicitation clause prevents a former employee or business partner from trying to “poach” your clients or employees after leaving the practice. These clauses typically prohibit:

  • Contacting former clients with the intent to move their business elsewhere
  • Recruiting or hiring current employees of the practice
  • Using confidential information to target patients or staff

Non-solicitation provisions are often more enforceable than non-competes because they are seen as less restrictive and more focused on preserving the practice’s investments in relationships and personnel.

Common Pitfalls in Veterinary Contracts

Even with the best intentions, poorly written non-compete and non-solicitation clauses can lead to confusion or litigation. Some common issues include:

  • Unclear definitions of services or competitors: Broad language like “any competing veterinary service” can be challenged. Be specific.
  • Unreasonable geographic areas: A 50-mile radius might be excessive in an urban setting but fair in a rural one. Context matters.
  • Lack of consideration: In some states, continued employment alone may not be sufficient to enforce a non-compete. There needs to be something of value exchanged (such as a bonus or promotion).
  • Overlapping or conflicting provisions: Multiple agreements (employment, partnership, sale) may include different terms. These should be reviewed to ensure consistency.

Best Practices When Drafting or Reviewing These Clauses

To ensure your contracts hold up in court and support the practice’s goals:

  • Tailor them to your specific situation. Avoid using generic templates or borrowed language from unrelated industries.
  • Clearly define the restricted activities, time, and area. Ambiguity can make enforcement difficult.
  • Consider the employee’s role and level of access. A vet tech should not be held to the same standard as a senior veterinarian with an ownership interest.
  • Keep records of what information was shared. If you’re relying on confidential data as justification, document access and policies.
  • Review regularly. As your practice grows or laws change, you may need to update your agreements.

What to Do If a Clause Is Violated

If you believe a former employee or partner has breached a non-compete or non-solicitation agreement, time is critical. Legal steps may include:

  • Sending a cease-and-desist letter
  • Seeking injunctive relief to prevent further harm
  • Filing a claim for damages
  • Negotiating a settlement

Before taking any action, consult with a veterinary-focused legal team to assess your options and the likelihood of enforcement.

Protect Your Practice the Right Way

Non-compete and non-solicitation clauses can be powerful tools to protect your practice’s hard-earned reputation and client relationships—but only when used properly. Poorly drafted or overreaching agreements can do more harm than good.

At Mahan Law – Veterinary Law Firm, we help veterinary practices create clear, enforceable contracts that align with legal standards and business realities. Whether you’re hiring, restructuring, or preparing to sell, we can help you put the right protections in place. Contact us today to protect your practice.

Reviewing Leases and Real Estate Agreements for Veterinary Practices

Posted on

Real estate decisions can have a long-lasting impact on the success of your veterinary practice. Whether you’re opening a new location, expanding an existing clinic, or renegotiating a lease, the terms of your lease or real estate agreement can affect your financial flexibility, operational freedom, and long-term business value.

At Mahan Law, we help veterinary professionals evaluate and negotiate commercial leases and real estate contracts to ensure they’re fair, clear, and aligned with their business goals. Understanding the legal and financial implications of these documents is essential to avoiding unexpected costs and disputes down the road.

Understanding the Stakes in Veterinary Real Estate

Veterinary practices have unique needs when it comes to commercial space. Zoning requirements, noise regulations, parking availability, and space for medical equipment are just a few considerations that make these agreements more complex than standard office leases.

In many cases, veterinary professionals are so focused on starting or growing their practice that they sign a lease without a thorough review. Unfortunately, unfavorable lease terms can lead to:

  • Unanticipated rent increases
  • Restrictions on equipment use or remodeling
  • Penalties for early termination
  • Costly repair obligations
  • Disputes over property use or exclusivity

To avoid these pitfalls, it’s essential to examine every clause in the lease or real estate agreement—and negotiate where needed.

Key Lease Terms to Review

A commercial lease is a legally binding contract, and once it’s signed, you are committed to its terms. While landlords often use standard templates, these documents can—and should—be negotiated to suit the specific needs of your practice.

Here are some critical lease terms to review:

Rent and Escalation Clauses

The lease should clearly define the base rent and any increases over time. Look closely at:

  • How often rent increases
  • The formula used for increases (fixed amount or percentage)
  • Whether common area maintenance (CAM) fees or taxes are included or separate

Small, recurring increases can add up over the life of the lease.

Use Clauses

This clause defines how the space can be used. For veterinary practices, the lease must allow:

  • Medical services and procedures
  • On-site boarding or grooming (if applicable)
  • Use of X-ray and lab equipment

A vague or narrow use clause could limit your ability to expand services or introduce new revenue streams.

Tenant Improvements and Repairs

Veterinary practices often need to customize their space for medical use. Make sure the lease specifies:

  • Who pays for build-outs or improvements
  • Whether landlord approval is required
  • Who is responsible for repairs and maintenance

Some leases shift unexpected maintenance or HVAC costs onto the tenant, which can be expensive.

Assignment and Subletting

Your lease should allow flexibility if you sell your practice or want to bring in a partner. An assignment clause determines whether you can transfer the lease to a buyer or sublet part of the space.

Landlords may require approval for assignment or charge fees. Ideally, the lease includes reasonable terms for these scenarios.

Exit Terms

Early termination, relocation clauses, or personal guarantees can create challenges if you need to move or close the practice. Review:

  • Termination fees
  • Conditions for breaking the lease
  • Whether you are personally liable for lease obligations

Limiting personal exposure and having a clear exit strategy can protect your financial future.

Purchasing Property for Your Practice

In some cases, veterinary professionals choose to buy property instead of leasing. Owning your clinic can offer long-term investment benefits and greater control over the space, but it also involves added responsibilities.

When purchasing commercial real estate, key issues include:

  • Title and zoning verification
  • Property inspections and environmental reviews
  • Negotiating purchase and sale agreements
  • Reviewing loan documents
  • Understanding deed restrictions or easements

Our team can help ensure that all due diligence steps are followed and that the purchase agreement protects your interests.

How Mahan Law Can Help

We assist veterinarians at every stage of the lease or purchase process, including:

  • Reviewing lease or purchase documents
  • Identifying unfavorable terms
  • Negotiating with landlords or sellers
  • Coordinating with brokers and lenders
  • Guiding lease renewals or relocations

With industry-specific knowledge and a practical approach, we help you avoid common mistakes and secure agreements that support your goals.

Set Your Practice Up for Success

Real estate decisions are about more than location—they’re about protecting your investment, controlling your environment, and supporting your long-term growth. Whether you’re signing a new lease, renewing an existing one, or purchasing your clinic’s property, don’t go it alone.

Let Mahan Law – Veterinary Law Firm help you review and negotiate real estate agreements that work for your practice. Contact us today to ensure your veterinary practice has a solid and favorable lease or real estate agreement.

Buying an Emergency or 24-Hour Veterinary Clinic: What You Need to Know

Posted on

Veterinarians and practice owners may consider purchasing an emergency or 24-hour clinic to serve the needs of a greater number of clients. These clinics have become popular in recent years because they allow pet owners to seek care for their pets when they experience acute symptoms outside of standard business hours. However, potential buyers of an emergency or 24-hour veterinary clinic should familiarize themselves with the factors they must evaluate when considering whether to acquire the clinic. 

Understand the Market

One of the first steps you should take when considering a purchase of an emergency or 24-hour veterinary clinic includes evaluating the local market and the demand for emergency or 24-hour veterinary services. Evaluating the local market includes identifying the clinic’s geographic location and determining how many other similar clinics exist in the area. You may not want to purchase a clinic in a market already saturated with such clinics.

Furthermore, market research should evaluate the number of pet owners in the market and their willingness to see emergency or 24-hour care for their pets, which can become expensive compared to seeking veterinary appointments during regular business hours. Understanding the market can help determine whether a for-sale clinic represents a viable business opportunity.  

Evaluating the Clinic’s Financials

You can review the clinic’s financial records during due diligence to assess the business’s viability. The seller should provide you with access to financials, including profit and loss statements, balance sheets, and tax returns. Reviewing financial records can help you identify patterns in the business’s revenue, such as whether the clinic has stable revenues year-round, experiences seasonal fluctuations in revenue, or continues to have growing revenues. The financials can also help you understand costs particular to an emergency or 24-hour veterinary clinic, such as wages for overnight staff, security measures, and equipment and facility maintenance. 

Consider Operational Needs

Prospective purchasers of emergency or 24-hour veterinary clinics should assess the business’s operational needs, including the challenges of securing 24/7 staffing of veterinarians, technicians, and support staff. Buyers should recognize that 24/7 staffing can cause staff burnout and retention issues, as many people may not want to work overnight hours for extended periods. Due diligence will allow buyers to review the clinic’s current staffing and staff turnover rates. Buyers can also examine the clinic’s operational systems, such as scheduling practices, emergency protocols, and practice management software systems.

Regulatory and Licensing Requirements

Prospective buyers should also be certain an emergency or 24-hour clinic meets all applicable local and state regulations relevant to veterinary practices and businesses. In particular, the clinic should hold required local business licenses, licenses needed from the state veterinary board, and permits to store and dispense controlled substances. Purchasers may also consider whether the clinic will require specialized certifications or additional liability insurance to provide emergency or 24-hour services.  

Assess the Facility and Equipment

Due diligence will also allow you to inspect the facility to identify potentially worrisome maintenance issues and the building’s functionality for 24/7 operations. You can also inspect the clinic’s equipment to assess its age and condition and evaluate the need to replace or upgrade specific equipment, which can add to the cost of acquiring the clinic. In particular, you may consider whether the clinic has or can support technology to provide telemedicine services. Clients may favor a clinic that offers such services to assess potentially worrisome symptoms in pets, which may help pet owners avoid unnecessary trips to the clinic in the middle of the night. 

Contact a Veterinary Practice Law Firm Today

Before buying an emergency or 24-hour veterinary clinic to start or add to your practice, you can protect your financing and legal interests by working with experienced counsel to get the advice and support you need throughout the purchase and sale process. Contact Mahan Law today for an initial consultation to speak to a knowledgeable attorney about buying an emergency or 24-hour veterinary clinic. 

How to Identify Hidden Costs When Buying a Veterinary Practice

Posted on

Thinking about buying a veterinary practice but worried about hidden costs? You’re not alone. Many buyers focus on the sale price and overlook the extra expenses that can add up quickly. A missed detail in a lease, a vague asset list, or an unpaid tax bill could all turn into unexpected problems after the deal closes. A lawyer can review the practice’s documents, ask the right questions, and point out issues before you commit.

Unexpected Financial Liabilities Hidden in the Fine Print

When you buy a veterinary practice, you might also take on debts the seller hasn’t fully disclosed. These could include unpaid taxes, past-due vendor bills, or unfiled employee claims. A quick review of the practice’s financial statements might not show these issues, so you should ask for complete records of every financial obligation. A lawyer can review the purchase agreement to flag hidden liabilities before you sign anything.

Lease Provisions That Could Cost You Later

Not all problems come from the sale itself—some could come from the lease. Some leases might allow the landlord to move your clinic or take a cut if you sell later. Others could limit how you use the space or who you can hire. Always review the lease terms carefully. Don’t just assume you can expand, renew, or stay put. A lease can quietly add costs if you’re not careful.

Misleading Asset Inclusions or Exclusions

Don’t assume you’ll get everything you see when touring the clinic. Some sellers remove items before the sale, like exam tables, lab equipment, or even office supplies. If the agreement doesn’t list specific assets, you might need to replace them yourself, which could add to your costs considerably. Ask for a detailed list of what’s included in the sale and compare it with what you actually need to run your practice.

Inflated Goodwill or Questionable Valuations

Some sellers ask for more money than the practice is worth. They might claim “goodwill” adds value because of long-time customers or good reviews, but that value could disappear if staff leave and take clients with them. Always question how the seller calculated the price. Make sure the valuation comes from someone who understands veterinary practices, not just general business sales. An inflated sale price now could hurt you later.

Inconspicuous Facility or Equipment Issues

Worn-out equipment and outdated clinic space can lead to big repair bills. A clean-looking exam room might hide plumbing issues, broken tools, or a layout that slows you down. Don’t trust surface appearances. Inspect everything and bring in a third party if needed. Ask how old the equipment is and check maintenance records. If the seller hasn’t kept things up, you might need to invest heavily right away.

Staffing Costs and Employment Contract Surprises

If you inherit staff, you could also take on contracts, unpaid benefits, or promises made by the seller. Some employment agreements might guarantee raises, bonuses, or long-term positions that can drive up your operating costs. You should review every contract and employee policy before purchasing. Don’t wait until after the sale to discover you owe someone back pay or extra time off. These kinds of surprises can drain your budget quickly.

Cash Flow Misrepresentations

Sellers might give you income numbers that look solid on paper but don’t tell the full story. Some clients might routinely pay late, or insurance companies might delay or cut payments. A busy schedule doesn’t always mean a steady income. Check how the clinic collects payments. Ask how often clients cancel or no-show. Look at how much cash actually comes in each month instead of relying exclusively on summary reports.

How a Veterinary Attorney Can Help You Avoid Hidden Costs

If you’re looking to purchase a veterinary practice, a veterinary attorney can help you spot hidden costs before they become your responsibility. At Mahan Law, we review purchase agreements, leases, contracts, and financial records with a sharp eye for anything that could cost you more than you expect. We know what to look for and how to protect your interests. Contact us today to arrange your free consultation and learn more about how we can help.

Smiling veterinarian examining dog while dog owner holding pet in modern clinic with bright lighting. Scene showing friendly and caring environment

How an Attorney Helps with Business Licenses and Vendor Contracts for Veterinary Practices

Posted on

Opening a veterinary practice is a wonderful way to serve the community while doing what you love. But it takes work, and it’s a process that requires patient deliberation and the assistance of legal counsel. One specific way that an attorney can assist you and your practice is to help you acquire the business licenses and vendor contracts that you will need to successfully operate.

Mahan Law works with veterinary clients throughout the United States, including Florida, Ohio, Kentucky, and Indiana, to help them launch and grow their businesses while successfully addressing legal matters that may emerge at any stage of their existence. Find out how we can serve your practice today.

Licenses, Registrations, and Permits Your Practice May Need

The requirements of each state vary with respect to the licenses and related permissions like registrations and permits that a veterinarian practice must have. A few of the most common examples include:

  • Secretary of State registration: Most veterinary practices form as corporations or some form of limited liability company, and should file accordingly with the Secretary of State.
  • State and federal tax identification numbers: These are needed to ensure that the IRS and state taxing authorities recognize the business as unique and distinct from its owners.
  • Department of Labor: Assuming you hire employees, you will need to register your veterinary practice with the Department of Labor for unemployment insurance and other purposes.
  • Sales tax license: You will need to obtain this to collect any required sales tax on goods and services you sell.
  • Professional licenses: The veterinarians, technicians, radiologists, and other employees who require professional licenses should have and maintain them.
  • Premises license: The regulatory board in your state may require this if you provide certain veterinary medical services.
  • Controlled substances permits: Both the FDA and many state bodies require practices to acquire special permission to prescribe controlled substances.
  • Veterinary biological licenses: The use of veterinary biologics at commercial establishments, including veterinary practices, is generally regulated at the federal and state level.
  • Waste permits: The handling and disposal of hazardous and medical waste is integral to a veterinary practice and requires permits. 
  • X-ray permits: Installing and operating equipment that produces radiation requires a permit.
  • Kennel and boarding licenses: Many veterinarians board animals for treatment and monitoring purposes, and must obtain the proper permission to do so.
  • Other licenses and permits: Depending on the jurisdiction in which your practice operates, you could also need a general business license, zoning permit, certificate of occupancy, and much more.

Vendor Contracts for Your Practice

Once you secure the required government permissions, you need to start entering into agreements with the various vendors who will provide the goods and services you need for your practice. Among these are contracts for:

  • Medical and pharmaceutical supplies
  • Laboratory and testing services
  • Equipment
  • IT, computers, and data storage
  • Accounting, taxes, and payroll
  • Credit card and ACH processing
  • Invoicing
  • Insurance
  • Custodial services
  • Security

As with any other aspect of running a veterinary practice, the specific vendor needs of your business will be different from the needs of others. You therefore may require many other services and the vendors who will provide them.

How We Help Veterinary Practices With Licenses and Contracts

When you retain Mahan Law to assist with the startup or ongoing operation of your veterinary practice, we get to work by:

  • Fully reviewing the operations of your practice to determine which permits, licenses, registrations, and similar documents are necessary
  • Helping you acquire and maintain all required federal, state, and local government permissions
  • Explaining any compliance requirements your business and your employees must follow
  • Defending your practice against regulatory or disciplinary actions stemming from any licenses or other permissions
  • Examining your business operations to help you decide which vendors you will need
  • Effectively negotiating advantageous vendor contracts that help your practice obtain the goods and services you need at a reasonable price
  • Drafting your vendor contracts in a manner that protects your legal rights and financial interests
  • Litigating on your behalf, as either a plaintiff or a defendant, concerning any legal issues that may arise from your contracts

Get Started WIth Our Dedicated Veterinary Law Attorney Today

Dealing with the legal and business side of running a practice may seem daunting, but with the right legal counsel by your side you can complete all the necessary steps so you can focus on delivering excellent veterinary service. Learn more today by reaching out to Mahan Law. You can give us a call or complete our online contact form to get started.

Professional veterinarian doctor makes checkup of jack russel terrier dog in clinic, wears white coat and medic gloves, going to vaccinate. Dod owner comes with pet to vet. Animal healthcare

Financing Options for Veterinary Practice Buyers: Legal Implications

Posted on

Most veterinarians and investors wishing to purchase a veterinary practice will need to line up sufficient financing as a condition of completing the deal. These financing arrangements are typically the product of careful negotiations between the borrower and lender, memorialized in detailed contracts that often contain confusing legal jargon. Regardless of what type of financing you’ve arranged, it is imperative that you understand the terms of the agreement and what they mean for your practice.

Turn to Mahan Law. We can help you not only line up and negotiate your financing but better understand the terms of the agreement into which you are about to enter.

Potential Financing Options

There are multiple ways to finance the purchase of a veterinary practice, each with its own set of benefits. A few of the most common financing options are:

  • Self-financing: Although the upfront costs of buying a practice usually foreclose the possibility of self-financing, it is still an option. If you have substantial savings or other means, such as investments that can be easily liquidated, you could finance the purchase yourself. A few benefits include no debt or interest payments, control over the money, and less financial risk.
  • Small Business Administration (SBA) loan: The SBA offers loans which can help individuals purchase veterinary practices. The loan money can serve a number of purposes such as startup capital, business expansion, and even the purchase of equipment and assets. SBA loans usually have flexible terms, reasonable down payments, and competitive rates.
  • Bank loan: Although a traditional loan from a bank tends to have a higher interest rate, the ultimate percentage may be based on various factors. If you have a strong relationship with your bank, for instance if you own several accounts and substantial collateral, you could bargain for a lower interest rate and better terms. These loans can often be customized to meet the exact needs of the veterinarian or investor who is purchasing the business.
  • Partnership financing: Many buyers choose to form partnerships with other individuals to better combine their resources, and this is no less true with respect to financing. Technically, this is not a financing option, but it does allow multiple partners to pool their money. Some advantages include shared risk, ease of obtaining financing, and access to capital.

Legal Implications of Each Financing Option

Although the different financing strategies have their own advantages, there are important legal considerations with each one. You should discuss your financing options with an experienced attorney who assists with the purchase of veterinary practices. Your attorney can discuss the following legal matters:

  • Self-financing: Although the risks are fairly low if you are financing your own purchase, you may be tempted to forego legal counsel and instead execute the transaction on your own. In doing so, you might risk making a poor investment decision. Also, if you decide to liquidate investments or other resources to provide the financing, you may incur tax consequences.
  • SBA loan: Defaulting on an SBA loan could result in the administration initiating legal action against you, which may lead to asset seizure. Any collateral that was pledged to obtain the loan could be forfeited. You will also be personally liable for repaying the money even if the business fails.
  • Bank loan: The legal and financial risks of defaulting on a bank loan are similar, including the forfeiture of any collateral and the risk of personal assets being taken to satisfy the terms of the loan. You can expect collections and legal action if you fail to make your payments, and late fees if you do not make them on time.
  • Partnership financing: Any time you are working with a group of other individuals to finance a business, there is the risk of legal issues. You should form a partnership agreement to manage the financing, purchase, and operation of the practice, but a partner may still breach the contract. If you and the other partners are not on the same page about how to run the veterinary practice, you can expect legal disputes.

Count On Mahan Law For the Legal Guidance You Need

Lining up financing to purchase a veterinary practice may seem daunting, but having seasoned legal representation will make the process easier and less stressful. Let Mahan Law assist you with all aspects of financing. Give us a call or complete our online form to begin working with us.

Female veterinarian examining beagle dog on table in a modern veterinary clinic with sunlight coming through windows in background. Woman wearing white coat gently holding dog's muzzle

How to Structure a Veterinary Practice Buy-Sell Agreement

Posted on

Veterinary medicine is similar to other practices in that much of it concerns both practical and legal considerations of business law. Selling your ownership interest in a practice or preparing for a major life event such as retirement will require that you take steps to protect your rights. The best way to do this is by using a buy-sell agreement.

This important contract can help you avoid unnecessary disputes with other owners of your practice and facilitate the process as smoothly as possible. Count on the dedicated attorneys of Mahan Law to advise you.

What is a Buy-Sell Agreement?

All business owners will at some point encounter major life changes such as retirement, disability, or even death. These will affect their interest in and ultimate fate of the business. It can happen to any business organization, including a veterinary practice.

The question then arises: what happens to that member’s share in the business? This is where a buy-sell agreement comes in. This contract allows owners of a veterinary practice to set the terms and conditions of either the sale or transfer of an owner’s business interests when a significant life event occurs.

What Terms Should the Buy-Sell Agreement Include?

The specific terms of your veterinary practice buy-sell agreement will depend on the unique features of your business. In general, however, your agreement should cover such matters as:

Which events trigger the agreement

Every business owner will experience something that will require them to sell their ownership and involvement in a practice. Some examples include:

  • Death
  • Retirement
  • Withdrawal from the practice
  • Legal or mental incapacity
  • Disability or illness
  • Disciplinary action or revocation of a veterinarian’s license
  • Bankruptcy
  • Divorce and other legal problems
  • Internal disputes with other business owners

Certain events, like licensing board disciplinary actions, may require an owner to sever their ties with the practice so that the interests of the other owners are not jeopardized. Regardless, all of the above and other occurrences should be carefully defined so it is clear when the buy-sell agreement is activated and the process of business transition begins.

To whom the interest may be sold

The agreement should restrict who has the right to purchase a departing member’s share in the veterinary practice. For example, the buy-sell agreement may specify that only another veterinarian is allowed to buy into or acquire a share of the business. Also, the agreement may give the other business owners a right to purchase the departing owner’s share first, thereby disallowing the sale to someone the remaining owners may not want involved with the practice.

How to handle a sudden event like the death of an owner

Some life events are not only significant but they can occur with little to no warning. The sudden death, illness, or incapacity of an owner may leave the other members in a legal predicament if plans were not already made about what to do with that individual’s interest. There will potentially be estate law considerations built into this as well, with which your attorney can assist.

The price or valuation method

What is the departing member’s share in the business worth, or how would one ascertain its value? Determining the price to pay for the departing owner’s interest, or a means of calculating it, is essential to ensuring that everyone is satisfied with the business transition. The price or valuation method must be clearly defined in enough detail to avoid disputes.

Restrictive covenants

These are terms which limit what the departing business owner may do after leaving the veterinary practice. A buy-sell agreement will usually prevent the owner from exiting the practice and opening another one in a nearby location for a period of time. The covenants can also limit the departing owner’s ability to solicit customers, restrict them from using confidential customer information, and even safeguard proprietary business practices or methods.

Let Our Team Guide Your Veterinary Practice

Our goal at Mahan Law is to help veterinarians and veterinary business owners properly manage the legal affairs of their practices so they can keep doing what they love. Find out how we can serve your organization with a buy-sell agreement. Connect with our office today to get started.

A vet looks at a dog

Internal vs. External Succession: Which is Right for Your Veterinary Practice?

Posted on

Operating a veterinary practice can be a rewarding experience, but the time will come when you are ready to sell your business and move on to the next stage of your life. There are broadly two options for doing so: internal succession and external succession.

Both of these options have their own advantages and disadvantages, so understanding them can help you decide which is best and begin planning now. Mahan Law is ready to help you make an informed decision of how to proceed.

Internal and External Succession

Business succession occurs when someone else buys a person’s business or their ownership interest in a business. A specific form of this is internal succession, which is selling the business to another business owner or member such as a partner or associate. It essentially maintains ownership of the business with those who are already involved with the company rather than bringing in an outsider.

Conversely, external succession means selling the practice (or at least one’s ownership interest in it) to a third party, such as another company or an individual who was not originally involved with it. In some cases it involves mergers and acquisitions with competitors or larger corporations.

Pros and Cons of Both

There are reasons to carefully consider both approaches when it comes to selling your veterinary practice. As you weigh your decision, keep in mind the following:

Advantages of internal succession

  • Maintaining the culture of the practice: Every business has its own culture and way of doing things, so selling to someone already in the company can facilitate a smooth transition.
  • Selling to a known group: A major advantage is that you already know your other partners or associates, and don’t have to risk the “unknown” factor.
  • Drawing from a high-talent pool: If your business has other talented individuals running it, you can draw from this pool of talent by selling the practice to them.

Disadvantages of internal succession

  • Risk of stale ideas: Your existing culture is important, but are you maintaining it at the expense of new modes of thinking that could benefit your practice and all who are involved with it?
  • Internal rivalries: The other owners or associates who may want to buy your practice (or your share in it) might not agree on who should buy it and under what terms, sparking conflict.
  • Not ideal for low-talent pools: If you have doubts about the business acumen of the ones wanting to buy your practice, this should give you pause.

Advantages of external succession

  • Injecting new life into your business: Perhaps your dental practice has stagnated and is in need of new energy and enthusiasm; this may motivate you to shake things up by selling it to an outsider.
  • New skill sets and experiences: Allowing a third party to buy your practice may mean that someone with different skills, resources, and experiences will enrich your business.
  • Avoids internal strife: You don’t want the other owners or associates fighting over who gets to buy your practice or share of it, so going to an outsider skips this problem.

Disadvantages of external succession

  • The “unknown” quantity: There is always a risk that by bringing in someone from the outside to purchase your dental practice or ownership share, you may be inviting a host of unknown problems.
  • Longer sale process: It usually takes longer to sell a dental practice to someone outside the business, which could impede growth and drain resources.
  • Possible additional expenses: Selling to an outsider may require your practice to incur additional costs, such as relocation expenses, so factor these in.

Ready to Sell Your Practice? Turn to Mahan Law

The team at Mahan Law knows that the decision of selling your dental practice is a major life event for you. We can review your business and personal objectives, discuss the differences between internal and external succession, and help you select the option that is right for you. Contact us now to start working on your personalized plan.

How to Protect Client Information: Data Privacy Best Practices for Veterinary Clinics

Posted on

Veterinary practices maintain sensitive client information, including financial details, such as credit card information and Social Security numbers, that need to be protected from unauthorized access. Unfortunately, approximately 11,000 veterinary practices in the United States experience a cyber attack annually. 

Effective data privacy best practices can help veterinary practice owners protect client information from cyber security attacks. Veterinarians can follow the best practices discussed below to protect client information. 

Understand State Data Protection Laws

Data privacy laws govern how businesses handle data electronically and what they must do to protect sensitive data. Veterinary practices must adhere to data privacy laws. For example, HIPAA, a federal law, requires veterinary practices to safeguard the animal owner’s name, address, and other private information. 

Some states have additional data protection laws. California only allows sharing veterinary medical records with third parties for diagnosis or treatment purposes. Working with an experienced attorney can help you ensure your veterinary practice complies with all applicable state and federal data security laws. 

Train Staff Members about Cybersecurity Threats

Training staff about cybersecurity threats is crucial to protecting client information in your veterinary practice. The first step is to train your staff members on the basics of cybersecurity, including common threats such as phishing attacks, malware, and social engineering. 

Using real-life examples relevant to your veterinary practice to illustrate potential risks can help your staff members quickly identify potential future threats. Provide clear guidelines on recognizing suspicious emails or activities. Emphasize the importance of strong password and data encryption practices. 

Encourage staff to ask questions and ensure they know how to report any cyber security concerns or experiences. Many veterinary practices reinforce data security training with interactive methods like simulations or quizzes. Finally, ensure everyone understands their role in protecting sensitive client data. Regularly updating staff training materials to reflect current cybersecurity trends will help your staff members stay prepared.

Back-Up Your Veterinary Practice’s Data

Backing up your veterinary practice’s data protects sensitive client information during a cyberattack or data loss. Using a robust backup system and scheduling regular backups of all critical data, including client records, treatment histories, and financial information, is crucial. 

Using local and cloud storage solutions creates redundancy, protecting against hardware failures and electricity loss. It is essential to regularly check your backup data to confirm it can be restored quickly and accurately when needed. Also, consider encrypting backup data to prevent unauthorized access. Educating your staff on the importance of data backup can foster a culture of data protection.

Implement a Cyber Security Incident Response Plan 

Unfortunately, cyber security attacks on veterinary practice data can occur, even with safeguards in place. Creating a cyber security incident response plan for your veterinary practice can help you respond in a way that protects your veterinary practice. Engaging in risk assessment can help you identify vulnerabilities and begin outlining procedures for detecting, reporting, and responding to cybersecurity incidents. Staff members should receive training to help all staff understand their roles. A well-structured incident response plan can significantly mitigate the impact of cyber threats and protect sensitive client information.

Contact a Skilled Veterinary Attorney Today

At Mahan Law – Veterinary Law Firm, we recognize veterinary practices’ unique data security challenges. Our proactive approach assists you in implementing best practices for data management, such as password policies, encryption techniques, and cloud storage options. We focus on disaster recovery planning, ensuring your practice is ready for unexpected events. Don’t hesitate to contact Mahan Law – Veterinary Law Firm to schedule a free case evaluation.

How to Negotiate Favorable Terms in Veterinary Vendor Contracts

Posted on

In the veterinary industry, vendor contracts are crucial in ensuring that your practice runs smoothly and efficiently. The terms negotiated in these contracts directly impact your bottom line, from medical supplies and pharmaceuticals to equipment and technology. A well-negotiated vendor contract saves money and ensures your practice receives consistent, high-quality products and services.

Here are some key strategies from Mahan Law to help your veterinary practice secure better terms in vendor contracts.

Understand Your Needs and Leverage Your Volume

Before entering negotiations, evaluate your practice’s specific needs. Assess the products and services you require most often, and identify areas where bulk purchasing could save costs. Vendors frequently provide discounts for large orders, so understanding your volume and demonstrating a consistent need can strengthen your bargaining position.

For example, if your practice regularly purchases a particular medication, approach the vendor with a detailed forecast of your expected purchases. Show them the potential for a long-term relationship and inquire about pricing discounts for bulk orders or repeat business.

Research and Compare Vendors

Knowledge is power when negotiating. Research multiple vendors to understand their pricing structures, terms, and any added benefits they may offer. Comparing vendors allows you to identify industry benchmarks and gives you leverage to negotiate better terms with your preferred supplier.

For instance, if a competitor offers lower prices or more favorable delivery terms, use this information to ask your current vendor to match or beat their offer. This approach improves your negotiating position and ensures you get the best value for your money.

Negotiate Long-Term Discounts

Vendors often value long-term partnerships, as these relationships provide stability and predictable income. Use this to your advantage by requesting long-term discounts in exchange for signing multi-year agreements or committing to specific purchase thresholds.

For example, if you’re negotiating a contract for veterinary surgical equipment, ask about price reductions for committing to a three-year supply agreement. A longer commitment can result in significant cost savings while providing your practice with a reliable supply chain.

Focus on Delivery and Inventory Flexibility

Timely delivery of supplies is critical to keeping your practice operational. When negotiating, prioritize favorable delivery terms that ensure products arrive when you need them. Discuss options for expedited shipping, free delivery, or flexible inventory arrangements that allow for restocking without excessive delays.

Additionally, consider negotiating consignment inventory arrangements. Under this model, the vendor supplies your practice with stock but only charges you for what you use. This reduces upfront costs and helps manage cash flow more effectively.

Include Price Protection Clauses

Fluctuating costs in the supply chain can lead to unexpected price increases. To protect your practice, consider negotiating price protection clauses into your contracts. These clauses limit price increases over the contract term or tie adjustments to specific market indicators.

For example, you could agree to an annual price review with caps on increases tied to inflation or commodity price changes. This would ensure predictability in your budget and avoid sudden cost spikes that could strain your finances.

Review and Negotiate Terms Beyond Pricing

While cost is an essential factor, it’s equally important to consider other contract terms. Review payment schedules, warranties, return policies, and support services carefully. Favorable terms in these areas can save money and reduce headaches over the life of the contract.

For instance, you might negotiate extended warranties for diagnostic equipment or favorable return policies for products that do not meet your needs. These provisions can prevent unexpected expenses and disruptions to your practice.

Build Strong Vendor Relationships

A good working relationship with your vendors can lead to better terms over time. Be transparent about your needs and communicate regularly to ensure mutual understanding. Vendors who see your practice as a valuable partner are more likely to offer concessions or go the extra mile to accommodate your requests.

For example, a trusted vendor might offer early access to new products or provide training for your team at no additional cost. These benefits often stem from a solid, collaborative relationship.

Seek Professional Guidance When Needed

If you’re unsure about negotiating or reviewing vendor contracts, consider consulting a legal professional familiar with the veterinary industry. They can help identify areas for improvement, ensure the contract aligns with your practice’s needs, and protect your interests.

Your Trusted Veterinary Lawyers

Negotiating favorable terms in veterinary vendor contracts requires preparation, research, and strategic communication. By understanding your practice’s needs, leveraging your purchasing power, and focusing on more than just pricing, you can secure agreements that benefit your bottom line and ensure operational efficiency.

Strong vendor relationships and well-structured contracts provide the foundation for long-term success in your veterinary practice. Take the time to negotiate wisely—it’s an investment that will pay dividends in the years to come. Contact us today for your veterinary vendor contract needs.