When selling a dental practice, dentists often face a dilemma about whether they need dental practice brokers, dental transition lawyers, or both.
As you will see in this article, both brokers and lawyers have their place in a dental practice transition, and understanding the differences between their roles will help you make a sound decision and avoid unnecessary risk.
The central role of a dental practice broker in a sale is to facilitate the transaction and help dentists prepare, market, and sell their practice. But unlike general business brokers, dental-specific brokers have expertise in dental practice valuation, are familiar with industry trends, and understand key questions specific to dental businesses, such as patient retention.
Because of their expertise, dental brokers can screen and identify qualified buyers, negotiate favorable financial terms, and ensure the entire process remains confidential.
While there are plenty of benefits of hiring a dental broker, working exclusively with them has significant limitations:
While brokers often do have broad connections and specialized knowledge that can help you find a suitable buyer quickly, you still need a dental practice lawyer to protect your legal interests throughout the transaction.
Simply put, the broker's main responsibility is to find a qualified buyer and facilitate the sale, while the attorney's job is to protect your legal interests by ensuring full legal compliance, performing legal due diligence, and ensuring the documentation accurately reflects the transaction and protects your rights.
An experienced dental transaction lawyer will carefully review and negotiate purchase agreements, as well as supplementary documentation such as letters of intent, lease agreements, employment agreements, and closing documents.
Additionally, dental practices have nuances, such as prepaid procedures, unfinished dentistry, and redo work, all of which need to be carefully addressed in the contracts.
Plus, a good lawyer for dentists will ensure your dental business is in good standing when you sell it, which may positively impact the selling price and help avoid future disputes.
Furthermore, if the transaction involves a corporate buyer or a Dental Service Organization (DSO), working with a dental practice acquisition attorney becomes even more important due to additional complexities, such as DSO partnership taxation.
At Finn Legal, this is one of the most common questions we receive from dentists who are interested in selling their practices, and the short answer is: No, brokers do not replace dental practice lawyers. But the same goes the other way around - lawyers don't replace dental practice brokers either.
Instead of replacing one another, brokers and attorneys have complementary roles throughout the entire transaction, and ideally work together.
Brokers help maximize the market value and assist in negotiations. At the same time, a dental practice lawyer ensures the transaction is legally sound and protects your long-term interests by ensuring compliance and minimizing legal risk.
In fact, at Finn Legal, we recommend working with both professionals, and we collaborate with leading dental brokers who help us connect our clients with potential buyers and sellers.
We would also like to highlight the importance of specialized dental brokers. Due to the nuances of the dental business and the sensitive nature of dentist-patient relationships, we advise against choosing general business brokers.
Only specialized dental brokers can fully understand the true nature of a dental business, which will not only maximize the selling price but also ensure that the seller's business and the buyer's intent are a good match, preventing future problems. We work with some of the best dental brokers in the country and would be happy to put you in touch with one of them if you are thinking about selling your practice.
Having a specialized dental business broker alongside an experienced dental transaction attorney will ensure excellent financial terms and streamlined negotiations, while reducing legal risks and ensuring the transaction is fully compliant and proceeds as smoothly as possible.
Buying or selling a dental practice? Don't let legal delays stall your deal. Contact Finn Legal for a personalized strategy that protects your interests. We also partner with leading dental brokers to protect your interests throughout the process and fast-track your closing.
