Dentistry Uncensored with Howard Farran
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1110 Dental Law with Joseph L  McGregor: Dentistry Uncensored with Howard Farran

1110 Dental Law with Joseph L McGregor: Dentistry Uncensored with Howard Farran

11/16/2018 9:58:23 AM   |   Comments: 1   |   Views: 221
Joseph McGregor is a leading dental attorney based out of Dallas, Texas. He and his team handle a diverse array of dental transactions, including practice sales, practice startups, and employment agreements. Joseph is a 2007 graduate of BYU Law. He is the father of 5, enjoys reading, the outdoors, traveling, and photography. He is also a devoted sports fan, with his primary loves being BYU Football, the Texas Rangers baseball, and Huddersfield Town soccer.


AUDIO-DUwHF #1110 Joseph L. McGregor


VIDEO-DUwHF #1110 Joseph L. McGregor


Howard: It's just a huge honor for me today to be podcast interview Joseph McGregor who is a leading dental attorney based out of Dallas Texas he and his team handle a diverse array of dental transactions including practice sales, practice startups and employment agreements. Joseph is a 2007 graduate of BYU law he is the father of five, enjoys reading, the outdoors, traveling and photography. He is also devoted sports fan with his primary love being BYU football the Texas Rangers and Huddersfield Town soccer. You did not mention the Dallas Cowboys how did that game finish last night they were with the Eagles right?

Joseph: Yeah I don't even know I've fallen out of Dallas Cowboy fandom I never replaced them, I just don't follow them as much anymore.

Howard: You know when I was little that was America's team but I think you'd have to say probably now it might be the Patriots but somewhere between the Patriots and Dallas.

Joseph: That hurts, when growing up our Sundays revolved around watching the Cowboys but now it revolves around getting kids ready for school so.

Howard: Right on, I love your last name Joseph McGregor because I'm a hundred percent Irish and the fighter McGregor is he's so fun to watch, he's a little on the crazy side but he has fun to watch but I noticed he he spells a ma C which is Scottish and you spell your name MC which is actually Irish but actually I did my whole family tree, turns out you know you know the United Kingdom you know they call that anglo-saxon you know what you know where those people came from?

Joseph: Some of them and some of them came from France

Howard: No they they actually came from Germany that tribe was an outbreak of Germany's they became anglo-saxons and then they moved up into Scotland and Wales and then the Scottish people jumped over to Irish. So when you trace back Irish he goes Irish to Scotland to United Kingdom to Germany and then back down to Africa interesting family tree but hey

Joseph: I get my ancestry DNA kit back in a week or two so I'll learn more about myself here shortly.

Howard: Yeah I did that too and the most interesting thing for mine was that I was like 80% on 86% Irish and 4% neanderthal, so if I'm looking kind of caveman to you right now on the YouTube but their's a genetic 23andme but hey my gosh I'm a big fan of your podcasts what's what's telling the name of your podcast.

Joseph: So we do the the Jaw Law podcast which is

Howard: Jaw law podcast

Joseph: That's right that's right

Howard: Have you started uploading it on the Dentaltown app?

Joseph: We are working on that I'm slow when it comes to technology so we're that's next step.

Howard: Well I'll tell you what the I'm so excited you know they asked me to start a podcast a year before the Hillary and Trump election they said they had an hour commute to work it was just they couldn't listen to that bullshit for an hour each way it's too toxic it's too poisonous puts them in a bad mood and now we started we added that podcast, their is 60 people in dentistry uploading your podcast and I don't even have the most downloads on the dentaltown I have like a half million on the dentaltown I have another guy has over six hundred and six hundred thousand downloads but it's amazing because these guys every time I lecture, I mean I just did three shows out in New Jersey last week and they were telling me that they you know they have an hour ride an hour commute each way and they they want ten shows a week and my number one complaint on this show was that I only do four shows a week and they were asking me if there's any way I could do ten and I was like that'd be a hell no but with guys like you answering uploading more podcasts and then also what happens on the dentaltown app is when you upload a dentaltown app your iTunes will explode because they found it on the dental you know there's a quarter million dentists on dentaltown they found it on the the website. So educate us what's hot and what's not in dental law.

Joseph: Well I don't think anything's ever hot but as far as we are concerned I think right now we're seeing a lot of a lot of interest in in people wanting to be entrepreneurs ,want to own their own practice and things like that but they're kind of hitting a lot of a lot of walls out there mainly with availability in terms of buying a practice and a lot of congestion when it comes to where they want to live and practice and startup I guess kind of kind of bleeds over into that as well. Their's a lot of there's a lot of dentists that are doing the same thing and so I think that's the hot topic right now is yeah I want to do something but where can I do this.

Howard: So how many episodes do you have on your jaw law podcast?

Joseph: So I think right now we think we're at 12 or 13 and so we've got a few in the can that need to get uploaded and so we're trying to make this in every week thing but we've taken a little bit of a little hiatus when we were trying to get some work cleared out but we've recorded a few lately so they should be coming back on like I said and intended to be a weekly thing.

Howard: Now is yours audio only on iTunes or you doing video?

Joseph: It is audio only and as you can see I don't know that video is a great idea for me I've got a face for audio only.

Howard: My mom told me I had a face for radio and that's why I put it on YouTube but no I'm basically it is a seller's market I mean and it's a demographic thing because when you go back 30 years ago that be the people retiring you know today in selling your practice they graduate 30 40 years ago graduation classes were about 4,000. So now graduation classes are about 6,000 so you got 2,000 more people looking to buy a practice than you guys selling a practice and what I have heard tell me if this is true or not because you know I hear this stuff on my show. I hate talking about the United States of America that term doesn't make any sense it's like EU you wouldn't compare Germany to Greece you wouldn't compare Portugal to Sweden and in the United States you wouldn't compare Alaska to Louisiana or Manhattan to Miami or Kansas to San Francisco, in fact the federal reserve even says the United States operates has about nine different economic countries flying under a single flag. So it's hard to make generalizations about the United States of America but are but some of the generalizations I've heard is that you put up a the sweet spot on a practice is about 750,000 you put a practice up for sale for 750 in our urban area it's totally liquid sells overnight but you put up a practice that's over 1.3 million to 1.5 million it kind of becomes it starts to become an illiquid asset and then of course rural markets are more illiquid than liquid. Are any of those statements true?

Joseph: No I think they're all true, I think that you know as the practice gets bigger sometimes you you price people out their ability to get financing and things like that but especially the rural thing I mean a lot of people ask us hey where's the best place to buy a practice and there's a lot of factors that go into what makes a good practice and and the life you want to live but so many great practices in rural areas our clients who are willing to go to the middle of nowhere I'm from the middle of nowhere so I can I can say that.

Howard: Where are you from?

Joseph: I'm from a little town called Salado Texas which my graduating class in high school is 57 kids.

Howard: Spell it

Joseph: Salado, yep

Howard: Is that down by Refugio?

Joseph: No it's a little north of Austin not about an hour 45 minutes or an hour of Austin it's so small that you know people will drive from Dallas to Austin all their lives and in the highway goes right through the middle of my town and I'll ask people have you ever heard of it and they'll say no I've never even heard of it and so that's that's what kind of town it is it's it's super small but there was one dentist and he did phenomenal now there's more but but I mean we see that all across the country it almost doesn't even matter what state and as we see deals you know whether it's in Iowa or here in Texas the city deals are just a different animal than the rural deals and they'll be great practices that can make people a lot of money really fast that just sit there.

Howard: My oldest son met the love of his life and now lives in Beeville, Texas have you ever heard of Beeville?

Joseph: Yeah I know Beeville, I've been to Beeville.

Howard: Really, yeah and he just absolutely loves it but my god they had a big storm just bought his first house just bought his first house 28 years old has one of those Texas storms knocks a tree over right splits his house in two oh my god.

Joseph: Was he in it at the time?

Howard: No they were they were luckily at their neighbor's house and the bed that my two of my grandchildren sleep in the bed frame was busted in half and they'd been in there sleeping I woulda lost two grandchildren, crazy but you know it's so tough to consult these people because I get it they're Millennials a third of the baby boomers a quarter of the baby boomers didn't have kids they're expecting a third of the Millennials not having kids so they want that urban lifestyle but my gosh when ever you open up a dental office and you're two hours from an airport a major airport where I could board Southwest Airlines and fly I mean there they did they do a million dollars right out of the gate they not 350 they don't take any insurance, PPOs, HMOs, nothing but the but so what do you tell these young kids out of school when you tell them to go live in Salado, Texas or Beeville, Texas what are they what percent of them will even listen to the demographic argument?

Joseph: 0% pretty much, I mean that's that's what I see and I'm sure I'm sure that's not exactly accurate I most of the times when I encounter somebody who's willing to live in that kind of community they come to us already having made that decision. So I probably haven't swayed anyone to live in a very small town.

Howard: but here's your kids you gotta listen to me right now like you said Salado was how far from Austin?

Joseph: It's probably about 45 minutes to an hour.

Howard: Yeah 45 minutes now so what I see in Arizona is people will wake up in the suburbs like Chandler and Glendale where there's about a dentist for every 2000 and they'll commute an hour into downtown Phoenix and then my time to get out of the car there's a dentist for every four or five hundred people and if they would have got in their car and commuted out of town an hour there's all these little towns that have 1500 people no dentists the draw is going to be at least 2x of that town. So if the town's got 1,200 there's 2400 people there's no competition there's no insurance there's no Medicaid Medicare any of that stuff I yeah they turned a thousand for a crown in Phoenix you charge a thousand for a crown and then Delta kicks it down to 650. So 35% of your overhead is just the PPO fee schedule yet when you go ahead rule there's there's no PPO fee schedule so that 35% is and then since we're at the verge of driverless cars I mean I don't care if that small town isn't is two hours away because you're within a couple of years that just having the alarm go off go crawl into a bed that's a box plug in your iPhone where you're going go back to bed for two hours and wake up and you're in the middle of nowhere and then you do four 10-hour days and then and then you go back to the urban town and party like a rockstar Friday Saturday Sunday they just don't get that.

Joseph: No and and you know those practices are easier and cheaper to run, you don't have competition so you don't have to invest in marketing if you don't want to wages a lot of times they're lower and it's not like you have competitors poaching your staff because there just aren't any competitors. Their's so many benefits and we've seen some clients just have phenomenal success stories being in those play paying off their student loans in just no time because there's so much cash being generated and they love it but I get it I try not to pass judgment. I live in a city I commute an hour to work so I'm doing the same thing I maybe I'm complaining about but you know when I think what's important is that they know what they're getting themselves into if they if you really want to be in the city then you need to know what you're signing up for and in the exact exceptions are the exceptions and I think it's oftentimes unreasonable as a lot of times people think that they're going to be the exception where they're gonna have this extremely lucrative cosmetic dentistry practice and everyone else is just gonna keep suffering from the from everything that you're warning about.

Howard: Yeah so I graduated May 11, 87 I got my office open September 21 87 took me 133 days to get that thing open for operatories... and it seems like now kids graduate and they just don't want to open up their own office they they say oh you know I think I should go work for a big DSO and I say well okay well if that's so if that's such great news then obviously the people at the DSO all those dentists have worked there three four five ten years right and then you go in those big Dsos and they have like yearly turnover. I'm like why are you running down a dream that all the graduating classes before you went that way and they were all gone within a year I mean I routinely meet kids five years out of school that have had seven associate jobs yeah that's like like dude so do you why do you think kids just don't do what we did thirty years ago just graduate and a hundred and thirty three days later be open for business and their own office?

Joseph: Well if I knew exactly I probably wouldn't be a lawyer I think that some of it has to do with the expectations that were creating. I think that some some of these recent grads look out and they see some problems that people are experiencing and like well if I can own my own practice and make you know a hundred 150 thousand dollars and have to deal with turnover and taxes and all this stuff and and I can just go work for Heartland or whoever Aspen and make the same money and not have to deal with it now I think that the you know looking at the next two or three years that probably makes sense and I feel that what people don't look at is maybe ten years down the road because that ten years down the road that just probably doesn't look the same that practice owner is probably going to be in a different different place and if everything goes according to plan probably make a lot more than they would have had they stayed in corporate dentistry or private practice anyway.

Howard: and what is and and by the way the Heartland was founded by a very good friend of mine Rick Workman out of Effingham his COO Pat Bauer is coming on the show, Pacific dental Steve Thorne I want to make abundantly clear that when we talk about employee turnover it's no different in the private sector see Heartland and Aspen, Pacific they live in an aquarium so everybody looks at them but they don't realize that these associates they're not even happy working for their own mom and dad. There's a big thread on dentaltown...

Joseph: Exactly I use Heartland and stuff because it's an easy example but I mean it's the same no matter where you go whether there's there's one owner or you know they've got one office or 16 offices or 250 it's that it's the same problems that you that exist.

Howard: and what are these problems what are you hearing when people come to you they've been a Heartland, Aspen, Pacific. Why are they not happy and want to stay there until they're 65 years old?

Joseph:  I think at some point there's this expectation that they want to have trol they want to kind of write their own destiny and that's not happening when you when you work for someone else and there's problems with that thinking that line of thinking but for the most part that's what I see it people are just tired of quote-unquote working for the man and they have ideas about what they want to do and the environment they want to practice in and so they think more and more about that and they're no longer satisfied with just getting that paycheck that they're getting from whatever business is cutting in that check.

Howard: My belief is that you know if you want to have a million employees like the military or Walmart you want the majority I'm under 21 and preferably just high school graduates by the time you have eight to ten years of college you're too intellectual it's like herding dads. I mean you ever noticed that you know you have a kid and he's 2 or 2 or 3 or 4 and he sees as a kid 2 or 3 or 4 next door he'll just run over the house open the door run into the kids bedroom but by the time you're 24 you know that that doesn't really fly you need to knock on the door and by the time you're 44 that's just too weird of the concept you might live down the street of some guy you never met. So as you get older and more complicated and more educated there's just a million more things you're not gonna agree on and like to say there's a thread on dentaltown today and I'm just laughing reading this because my dad had sonic drive-ins and I loved working for my dad but my five sisters hated working for my dad and if he and if he did anything said anything at work they'd bring it home and be pouting or whatever and to me were just business but there's this big article there's the big thread out on dentaltown about this guy he's really really sad because it's not working out between him and his dad and I'm just sitting there thinking you don't want to blow up the relationship with your dad over a dental office just go on your own. So these kids want to know they don't want to call you or talk to you because they think well I have too much student loans you're not gonna listen to me your website is www.McGregorfirm.com no Mac it's MCGregor firm. What are these kids gonna find on your site, how many years do they have to be out of school before financing will even listen to them, how much student loans is so much where you're gonna say come back later when you paid half this down. So talk about talk about your website and and what they're gonna find on your site and financing opportunities and limits and constraints.

Joseph: So you know with with us on on our website we probably should do a better job of making it more inviting but ultimately the purpose of our website is to get somebody to call us, because we found that just it's sometimes hard to give general advice and we've tried to hand out a few frequently asked questions type of information on our website so that's what usually no find but ultimately we want to talk to to these people and there's no too soon for us we don't charge by the hour so we welcome those phone call us.

Howard: How much is an introductory call?

Joseph: We don't, we never charge to talk...

Howard: What's the phone number for the introductory call?

Joseph: It's 214 oh my gosh I never call myself Howard

Howard: Is this two one four seven two zero nine five five that's right two one four seven two zero nine five five five that call is usually a million dollars but if you tell them you got it on Dentistry uncensored it's actually free.

Joseph: That's right

Howard: and white and you know they're in their own bubble they're in their own world they're commuting to work. What would you say are like the top three reasons that people are calling you what are the top three subjects.

Joseph: So just to break those up about like where they're at in their in their life I think that usually we're getting the call because somebody's about to do something like buy a practice and usually it's buying a practice but also for starting to practice. A lot of times we get practice owners who call and it's almost always employment related having problems with their employees and they are looking for legal guidance on you know how they can fire them and things like that. I'd say probably the other the other one is just general planning now people who are really ahead of the curve and are getting out in front of it they know they're gonna be working for the next year or two but they're trying to put all their ducks in a row and they're they're calling us and saying hey what do I need to know how do I need to prepare and who are the other people I need to talk to besides lawyer.

Howard: Okay so let's start with buying a practice, am I gonna be able to get financing if I just graduated you know this year and I have $400,000 of student loans?

Joseph: Well I would say first of all I'm always surprised at how people come up with with financing but no I think that typically that we're seeing banks want to want them to get a paycheck for about it about two years or so and improve that they're not a disaster in the chair so that's what usually what we're seeing.

Howard: So you see that they want two years experience?

Joseph: That seems to be the threshold we've seen people get money sooner than that and like I said I'm sometimes amazed at how interested banks are to give money to dentists but I'd say that in general it seems to be that the people who give money the most easily our people have worked at least two years.

Howard: Well there's the student default rate says a lot about Homo Sapien I mean the the once you're over seventy-five thousand dollars of student loans there's almost no default rate most of the fall it's twenty-five thousand under they don't really skin a game when you buy a $750,000 dental office in default rates less than 0.4% you just have too much skin in the game. Just like with your five kids if you split the cost of the bicycle with your kid they'll wash it wax and park it in their bedroom but if you buy the bicycle form a hundred percent you got to keep reminding him not to leave it in the front yard. I mean with almost Sabian if they don't have any skin in the game it's tough. So you like them to be out two years is there a range of practice that's more liquid than a liquid what is where do you start to become ill liquid?

Joseph: You know I think that the the practices that we see have liquidity issues are actually the the people who are trying to do the turnarounds. We see a lot of people looking for value practices and and they're you know they're producing three hundred and twenty thousand dollars and and they're virtually not liquid just right out of the gate and the expectation is that you're gonna be different than that seller and you've got it figured out and you're gonna turn it around and sometimes that happens but I'm interested I'm always interested to see how those play themselves out but I I think that the liquidity issue comes up most often we're seeing those sub four hundred thousand dollar practices.

Howard: So you said the next number one reason people calls employment problems and I've had the CEOs of the 20 largest dsos on my show and if you go back a decade they used to like to buy a lot of existing practices but now they've quit doing that because of the employment issues and the turnaround scenario their most common problem is is they'll buy a dental office and the labor will be 30, 35% and they need to get it down a 25%and if I say hey Joseph McGregor gosh we used to pay you $30 an hour and we need to move that down to twenty two dollars an hour because Doc's been overpaying he's giving you a raise every time the Earth's gone around the Sun and we don't give raises on the solar system we give them on productivity and and then the morale is so bad and there's quitting and turnover and now the DSOs are saying that a turnaround situation, high overhead you have all this legacy staff that's not open to new ideas and you know what we'd rather just open up a de novo from scratch and start with people at the right wages the right marketing. So I have seen a so now the selling of practice to a DSO has been kicked down from the 500 location to 900 location Pacific tunnels and heartlands now it seems like the only people buying existing turnarounds and a DSO have less than 10 locations and their tasting the nastiness of this fruit and they're you know.

Joseph: but it means it's the same thing even when you buy one practice those are things that people need to be aware of when they're buying just some retiring dentist's office. Those are always going to be a problem we frequently see overpaid and slightly under trained staff people who are not up-to-date with the latest trends in dentistry or latest equipment and procedures the law that's often not the best source of the most talented employees and then if you try to do something about it you have to be very delicate because you may just ruin this asset that you just purchased. So it's it's a tough problem to face and you have to have skill and I think sometimes we may be under appreciate how much people skill is needed in these scenarios.

Howard: Well yeah and I I've called it for 30 years that the only thing you want is the people skills I mean that's all you want if you can get along with your patients and your staff and you know how to lead people and present reman all your dreams will come true but if you have a PhD in math physics and chemistry and you're weird and you don't communicate and you're weird with people man your life is just so damn difficult. When they're calling you for employment problems what what what type of what are the most common employment problems?

Joseph: Well I mean it's just what we're talking about a lot of times people have owned the practice for a year or two and they're like okay I can't deal with this person anymore I need to get rid of her or get rid of him and they're asking us you know what do I need to do to make sure that they don't sue us later or claim unemployment just things like that but we also see a lot of times they'll fire someone in in an emotional fit and that person probably has a better real or often times has a much better relationship with the patients then then maybe the owner gave it credit for and all of a sudden a huge portion of their patients stopped showing up and they're like well why is this and can they do that and in questions like that. So I think a lot of times what we're seeing in these we've seen a lot of post transition employment issues and we also just see sometimes the criminal element to where somebody has been dipping their hands into the to the cash drawer or or some other thing like that but we at this firm don't handle things like that so we refer a lot of those out we hang on long enough to get the very interesting story and then hand them over someone else.

Howard: Well the criminal I usually see it's usually on cash narcotic or sex and those are three deals there.

Joseph: That really sums it up yeah.

Howard: Yeah they're either in buzzing or they start dipping in the narcotics a lot of times they're the dentist is involved with that to or the dentist wife is involved with that to and then also remember when you're an old fat bald ugly dentist and some really young hot girls sexually attracted to you ah there's probably a lot of strings attached to that I mean if you know...

Joseph: It's not because you've been working at the gym and they noticed all the sudden.

Howard: Yeah and so it's not that they actually thought you're Brad Pitt it's the fact that they're embezzling from you so they think well you know I'm gonna sleep with this guy because if he ever catches me embezzling then I'll be able to give them a decision okay I'll just walk but if I tell your wife I've been sleeping with you that's gonna be a million dollar divorce and I only embezzled a hundred thousand dollars same thing with when they're sharing narcotics or something like that. So a lot of times the sex is a back door trap and you just you just you know it's just what but I'm gonna go back into the when the dentist explodes emotionally and what I think that is, is two things number one the most successful people in the world are those that are willing to have that most number of uncomfortable conversations. So when you come to work it's so easy to say how was your weekend what did you do you know blah blah as just saying hey I'm come on dude we're supposed to be here at fifteen til for the staff meeting during the morning huddle and it's five minutes till why are late. You see you're not communicating what you're feeling now and a good way to measure that is gossip like if you go back to your private office and call your wife and saying I can't believe it that gosh darn Joseph McGregor came to work five minutes late and your wife should say hey look don't don't vent that to me because it's gonna make you feel better and you'll secrete dopamine you should hang up the phone right now and go back to Joseph McGregor and say Joe come on buddy what's the deal. So when when a staff member comes to you and gossip and says you know the hygienist buh-buh-buh-buh you got to stop them and say look and that you can't be telling that to me because that's gonna make you feel better it's gonna let pressure out of the pot come on let's go talk to her together and a lot of times I'll drag that employee back over to that employee and they didn't like that all they thought they were gonna come gossip to me and total privacy and then when I drag her back and say hey you know this lady you know that she's very upset because she feels like she's doing all the instruments and then I just like are you out of your mind and so humans are just weird they're weird they're complex.

Joseph: Yeah and I would say that almost almost perfectly uniform when somebody's talking about firing and one of their staffers almost 100% of the time and probably could be 100%of time they're saying I should have done this six months ago I should have done this a year ago or or you just they didn't they didn't act on it no nobody's firing people too early they're firing them too they they tolerate stuff way too long and and then it becomes complicated you're giving these people opportunities to talk behind your back and sabotage other things in other ways and you're setting a tone that's probably not the most productive in the office and yeah like I said almost every time someone calls with an employee problem they lament I should should have handled this three months ago when it first came up.

Howard: Higher slow and fire fast higher hello fire fast no you you just said that the cat's meow no one ever ever ever regrets firing someone they just when it's finally over they wish they did it a year ago and the reason is, is because you're hardwired you're social animal we have to all work together we have to follow the 400-pound gorilla. So it's completely unnatural to tell you something you don't want to hear. My whole my whole 2 million year evolutionary wiring is to try to get along with Joe so that we can hunt together successfully and if I get ran over by a wildebeest you'll help raise my children and so you're all hardwired to work in this social harmony and that is how business rules.

Joseph: I think there's something to that because I think there's something innate in us where we can recognize when somebody's not a great member of the tribe and and we're so afraid of what other people are gonna think of us or or how it's going to turn out especially in our modern we weren't really hardwired to work inside a dental office we were hardwired to hunt on the savanna and so we're we recognize and I think most people that I've talked to you that they knew it a long time ago, they things they saw that this unproductivity or this this harmful behavior and their little tribe and they didn't they failed to lead in that scenario.

Howard: and you're absolutely right they're always afraid what everyone else is gonna think and the most successful people they just don't care and they're and then what I won't tell you is that don't care what people think about you because no one's thinking about you, everyone's thinking about themselves and I always tell everybody that look a hundred and eight billion humans in the last two million years since the first two they think split off and a hundred eight billion already dead there's only eight billion alive so 95 percent of all your critics are dead and of the eight billion alive today you're never gonna meet 99.999% of them. So they all and the average funeral only has 24 people so I mean so quit think quit caring what anybody thinks about you and start making faster higher quality decisions that are five fingers as is this decision faster, easier, higher quality, lowering costs and more miniature.

Joseph: and I'll be honest I don't want those calls, those aren't really what we do we we'd much rather do what we call happy law we'd much rather help someone buy a practice or start a practice we don't want people to come in and complain about their staff and things I mean that has to happen and we're here to help but if the results of them being good people are good people but more effective leaders in their practice it was the result is they didn't call me for that I'd be perfectly fine so.

Howard: What's the opposite of happy law what do you call a sad law or what what do you call it?

Joseph: Anything else, no I mean anytime that that's like I mean it's not that we don't want to deal with conflict but the conflict is typically not productive you're destroying something whether it's goodwill or or the other person on the other end of the table but yeah just litigation in general I it's just not my world and have no interest in ever doing that and we refer all that kind of stuff out but we'd much rather deal with people both our client and the people on the other side of the table when both both sides are looking forward to it.

Howard: You know dental town has had five programmers since 1999 we got it running we decided to do it 98 got it up on St. Patrick's Day 99 so this St. Patricks day is actually a 20 year anniversary but one of my original programmers was a lawyer he was a family lawyer and he got he quit his whole law degree because all he was dealing with these these emotionally family issues and it was no draining and taxing I want to ask you one more thing about sad law that I don't understand. So we know when you get married and have sexs and children and vacations and family it sells and divorce 50% of the time so if I go become a partner with a dentist I don't have any of those glues we're not making love making children sharing vacations. Do you think a partnership in dentistry has the same divorce rate as marriage less, more?

Joseph: You know I I haven't I haven't looked at the numbers at least not not recently and I do think that one critical difference is that you don't have to you know have to sleep with your partner in fact we discourage that but there's an ability to leave the office especially when you don't like things and one of the problems that we've seen is kind of like when we have employees that need to be fired sometimes these partnerships stop being productive and they're still hanging on, their they're hoping that they're just you know put their head down and and not be happy and that's okay if they're not happy so long as they don't have to deal with with conflict. I would guess well I mean legally all partnerships end at some point and so the stats you may have to carve up exactly what we want to talk about but yeah I think that they suffer from a lot of the same problems that marriage encounters as well and you know again it comes back to people managing people and expectations and communication and and how effective are you at at speaking to the people around you and and not just setting expectations and following through with them. We see partnerships even the ones that we create we see them them go down, if I had to put a number on it I don't know that I feel that 50% I know that eventually they're gonna stop being partners but that can't be too far off.

Howard: Yeah I I just I can't tell you how many...

Joseph: Premature termination I guess is what we're talking about right is that it's ending sooner sooner than they wanted to yeah I would say that 50 percent is probably not too not too bad of a guess probably a lot of the same.

Howard: Again you know I like democracy is completely unnatural when you go into nature I mean you always have a 400-pound gorilla they're always in charge I don't care every time that elephants, chimpanzees, bonobos, it's always that I'm even religion the three biggest religions are monotheistic religions I mean what would happen if you had a god of lightning and a god of thunder well you know where they just where they just throw light and sigh mean it just it just it's really Harry s Truman and the ested actually just for us that's how hillbilly hick that boy was from Independence Missouri his middle name was just an initial intent harry s truman yet assign on his desk the buck stops here and it's very very confusing to staff when they don't have this monotheistic leader. You see it when the when the wife is the office manager or the husband's spouse the office manager where the what the dentist will say we're going left and then they run up to the office manager and the wife says no we're going right or there's two partners and one says yeah let's get a cad/cam and the other one says no let's use her lab and go into Invisalign and it's so much more it's the staff is so much happier when the buck stops here and I always tell people if you're a dentist and your wife or spouse or husband is office manager you got to have an org chart the staff has to know where the buck stops maybe you're the dentist and you just want to do dentistry and maybe your husband's the office manager and wants to run the staff in the show and whatever. I don't care what you do get a work chart and if you do have a partnership I don't care it Joseph and Joe and Howard or 50/50 partners that's very confusing to a dental assistant she wants to know who's my boss and she doesn't want to hear well it's Jo and Howard, no no it's it's Jo or Howard. You know otherwise decisions are made everything's confusing and when you're trying to lead your staff the whole time you're telling them which way to go they're thinking well maybe I should go have lunch with Jo a subway and maybe I'll get him to go the other way you know so get it get a clear work chart.

Joseph: and just really quickly that husband-wife dynamic in the office that's one of the more challenging dynamics that we have to encounter whether it's a transition or a partnership it's fun it can be super productive

Howard: Say that again, you're saying the spouse involved the dental with the dentist's

Joseph: It makes it very challenging it can make it very challenging. I think for exactly the reason that you stay people there's not as much clarity when when a spouse is involved. I we have clients who seem to operate very very well a husband and wife team in the office but sometimes I get the impression that they that between the two of them they work really well but everyone else in the office may not have the same opinion.

Howard: Well I mean it's legendary I mean you go to conventions they say well I'm looking for a dental office but I'm not gonna work where though the wife's the office manager I mean that's a legendary statement for 30 years I've been in this business. What could that...okay so right now you got a husband and wife going to work the woman's a dentist or a husband's office manager, what advice would you give them so they're not that couple?

Joseph: You mean to give to the husband and wife?

Howard: Yeah

Joseph: Yeah for us it's understanding where people get their direction from like if there's a continent is conflicting order then how do i decipher this if I'm a dental assistant how do I know and sometimes maybe your bifurcating you're saying hey the husband dentist is in charge of these decisions and the business manager wife is in charge of these decisions and that's how we're gonna do it you know. I don't know the answer necessarily to that but I do think that it's the lack of clarity causes a lot of problems and the ability that some staffers take to put the husband versus wife and that seems to cause a lot of office drama as well and and in there okay because because the the spouse interacts with the staff differently once the business manager and interacts with the on a business in a business context and the other spouse is the practitioner and interacts with them from that context and they evaluate or possibly evaluate them differently rate them differently and when they see that their's these people are sometimes the the staff is probably smarter than then we give them credit for and they understand those dynamics and they know how to protect their job by cuddling up to sometimes literally cuddling up cozying up to one or the other so and it causes a lot of problems.

Howard: Yeah and so something as I said there's wet hands dry hands know what hands clinicals your hand in someone's mouth there may be that it's dental driven and if it's a dry hands issue you know it's it's the the spouse but again it just comes down to a simple reward chart all Homo sapiens gorillas chimpanzees bonobos lions tigers elephants cheetahs they all need to know who the 400-pound gorilla is and they don't want to hear that there's two. Employee manual what percent in your what percent there's two hundred eleven thousand Americans alive right now that have active dental license 150,000 number general dentists 32 hours week or more thirty thousand specialist what percent of those full-time dental office do you think have an employee HR manual?

Joseph: There's two answers to this because I bet a lot of them do have one I don't know what the real number is but as far as could any of them tell you what's in their manual I think that's the problem and we see that all the time this becomes a very state specific legal issue but a lot of times what happens is the state law in your state will say you know this is the rule in this issue, absent any employee manual that you may have. So if you have an employee manual then the state law will recognize that but if you don't then we're gonna do this and so somebody will have a problem and we'll say well do you have a manual and they'll say yes we have a manual and well what does it say and they're like why I don't really know and so we'll have to go figure that out for them and sometimes and man I if I recall correctly I'd say more often than not it's not what they had expected and they can be locked into it so. I don't think that the majority of practices have a manual but I do think that the majority of those who do probably haven't purposefully develop that manual.

Howard: Okay do you recommend that they have an HR manual?

Joseph: I do think that it's helpful but only if it's purposeful. I think it's better to not have one if you're not going to know what's in it if you're just going to download it from Google then and not even read it yourself then it's not that meaningful. A manual can be an important way to communicate to your staff and set standards and expectations and it's something that you know a lot of people have a hard time communicating their disapproval and sometimes for people like that it's nice to be able to say listen this is spelled out in our manual you knew that this was going to be what we expected you didn't meet the expectation and so our manual says we have to fire you now. I think it could be a great tool.

Howard: Do you sell a manual or do you recommend the manual?

Joseph: We do you know the manuals of what is what it's something I would say is there are a lot of great providers of manuals and again so long as the clients we try not to sell too hard we do do that service but again it's we hold their hand and we try to help the client understand this isn't this in us telling you how to run your practice this is the interpretation of how you want to create an environment and of course there are legal parameters that you have to exist that happens a lot sometimes they'll say I want to do this and we're like well the law says you cannot do that so.

Howard: How much of that is a homogeneous federal law where we're all in America under the same laws versus state law like Arizona's our right to work state versus say California so so when you're dealing with clients do you deal with clients from all 50 states or?

Joseph: So yes but it depends so a manual is not something we would do in all 50 states we are pretty selective. At the end of the day we want to help and sometimes helping is not helping if if you're not an expert at what you're trying to do. So California we would never do a manual in California that is a world unto itself and but it's answered the legal question there are federal rules that apply and those are going to be consistent across the country but a lot of our clients are going to a lot of the rules that are federal in nature don't apply and it's going to be more state specific and we only handle those states that we feel where we can do it better than anybody else so.

Howard: You know I've been in Phoenix for 30 years and I guarantee I couldn't tell you how much of all the small business we get out here is just because they they couldn't take California anymore the legislation.

Joseph: Same here in Texas in Dallas we have a lot of a lot of transplants and I mean I haven't counted half of them probably are from California.

Howard: Yeah I mean it's just crazy and then to let let's switch to the dentist issue the dentist listening this right now podcasters tend to be under 30 I think you know there's not very many people in their 50s and 60s listening this I know Howard Glaser does and Ross Nash and some of you guys are always teasing me that they're old and listen to these things but most of them are all Millennials 90% emails but shoot me an email Howard@dentaltown.com tell me what you think this show where you're from, what you want to hear more of Howard@dentaltown.com but what they want to hear about is restrictive covenants and so if I go work so what do these kids need to know about restrictive covenants and I also want to tell you one other thing they always hear there was here hey look dude we're Harlem we got 800 offices we don't this is our contract take it or leave it we don't negotiate. They hear that from all the big boys is that a poker game and not true because on the other hand I always see how they spend so much money and trying to recruit dentists so which one is that I mean if you're spending all this money trying to recruit a dentist then where do you get this hardball poker hand that here's my employment contract take it or leave it which one here which one is it?

Joseph: So starting on that I do think that their's some truth that you know someone like Heartland or PDS they're going to invest quite a lot of money in constructing a contract and I'm sure they have meetings about and we can never do this or never do that but for the most part it's and this is this isn't me saying this this is feedback from clients it's hard to recruit the right dentist. Their's a lot of effort that goes into making sure there's a good fit between you as the candidate and those patients and when you have found the right person my experience has been that most companies and especially just private practice in general are probably more open minded to contract changes than people think and in fact, I mean we get that we get that call a year later after they've been working a year and they're trying to get out of the contract and there's something some horrible thing in their contract and like how enforceable is this and and like why did you sign that in the first place and we're more delicate than that but we asked them and they're like well I just I just wanted a job I had student loans that I are starting to come do I just needed to start working and we're talking about a few days of sitting down understanding what's in your contract exploring with them now that they've identified you as a good fit there just going to be way more open-minded then then you realize. So that's that's probably experts, even big contracts. Not big contracts, big companies are more open to change than people think. I think people are surprised a lot of times. We do once in a while get a contract where they said no yeah good thoughts way to you know way to help your client there but we're not gonna do anything but I'd say one out of 200 is like that.

Howard: Yeah I mean what would have you heard as the highest finder fee for finding a dentist?

Joseph: I don't know that I'm in tuned enough with that but I know that I've seen like 15,000, 25,000 and I mean they spend a lot of money identifying the right person.

Howard: Oh my god oh yeah a $5,000 finder's fee to get a dentist that these days is nothing I mean that I mean it's an entire industry just go to LinkedIn. I mean I think every third person on LinkedIn under dentistry is a recruitment person trying to find and but anyway I'm this is the one thing I would say I know a lot of people try to be nice I'm dentistry uncensored I'm not here to be your friend I'm here to tell you what you need to hear and whether you like me or not that's not the issue but my god one of the biggest problems I have with my homies is that when they graduate as a dentist they think they know everything and they'll go sign a ten-year office lease and they didn't even show it to a lawyer. I mean are you dumb or you an egomaniac and I also I'll show you one where there was this dentist only had two thousand square foot turns out the whole roof flooded leap whatever, his lease he was responsible for the whole roof and since their were vacancies on both sides he would have to fix the whole roof of this 15,000 square foot shopping center with the flat roof and anyway at the end of the day he lost his location and he had to do a BK and I'm like well who read that lease oh dude I'm a doctor of everything I mean I took calculus and physics. I mean they just a good businessman is a conductor a conductor has his back to the patients and the audience and if he and if he needs a drummer he's not gonna learn how to drum and be a lawyer and read his own lease he's gonna find a great lawyer and find a great basis and find a great piano player and they just why. How many times have you seen a dentist make a huge mistake because they didn't have a professional lawyer review the contract how many times you watch that?

Joseph: I mean that happens oh man it happens a lot.

Howard: Is it weekly?

Joseph: At least once a week we get somebody calling because they do we hear that they lament they said man I should have had a lawyer look at this.

Howard: Oh you think

Joseph: Yeah unfortunately it's we see sometimes it's catastrophic but at least it's pretty rare, a lot of times it's the employment in the employment context you know I would make two points I'm a lawyer and I as far as law goes I only do dental law which means if I'm gonna do a will I'm not gonna do my own will if I am gonna buy real estate well I can do that but I mean there's so much in law just being a lawyer doesn't qualify me to do anything in law it just means I can do what I do and so it's so much more if you don't even have that background don't try to be your own lawyer and I'd say just generally speaking and it's always hard to be too general about this but the dentists who are at the end of their career are probably on average more accepting of legal counsel then the young dentists. People who worth in five years of retiring are way more open to to hearing what we have to say than people who were five years within starting there career and again we've had it both ways but I think that their's something that gets learned over the course of their practice these these guys on the on the out end that that tell them hey you know I'm gonna stay in my lane and I'm gonna get somebody else and just like the conductor thing I'm going to get an expert to to deal in this and sometimes it takes people 30 years to learn that lesson and and hopefully they don't have one of those catastrophic events that teaches them that lesson for them.

Howard: What are the what are the biggest issues confronting our first-time practice owners that you're dealing with?

Joseph: I think that the biggest issues that we see is probably the mismatch between expectation and reality, without being too too harsh and critical I think sometimes people have these wonderful ideas and we love ambition as attorneys we benefit when somebody's ambitious and they are successful and we want to be a part of their life when they're growing but I think that one of the issues is that nobody is giving them hard truth and in reality and you know that's what one of things you do and one of the things we do and we have to tell clients a lot of times like listen I want you to be successful I'm not telling you these things because I horrible person I might be a horrible person but that's not why I'm telling you these things. That's that mismatch there's an expectation that somehow they're different and and we see a lot of concept congestion and we go back to talking about where people open up their practice everybody wants to live in the city and in and they think that they're going to do something a little different than the next person and that's what we have to really to coax out of the minute you know try to understand where there is sometimes our clients do have that figured out and we're impressed and we're blown away hey that's a great idea that's not something we've seen and it's rare that we see something for the first time but I think the biggest problem with first-time practice owners or people just getting into the concept of starting their practices is understanding that they're probably not the first to think of whatever idea they just thought of so.

Howard: I don't want to get too personal with you but I'm gonna get really personal with you and punch you right they got, when you married your wife did you have a prenuptial agreement?

Joseph:I didn't

Howard: See it so these dentists they come back and they're going back to work with mom so they don't have any contract mom said mom made her think that yeah you know you yeah someday this will all be yours and now the price is like 1.2 million and she thinks it's worth 750 and she didn't have a contract with her mom any more than you as a lawyer how to prenuptial with your wife. So I see the biggest emotional dilemmas on dentaltown and in person actually going back and working with their parents what would advice would you have on... because it's basically the same thing as a redemption I mean how how do you go back home to work with your mom and tell your mom you're gonna hire an attorney and his name's Joseph McGregor and he wants you to sign this contract and your mom's like I'm your mother.

Joseph: Right so I mean there's a few things going on there first of all absolutely right one of the most awkward scenarios that we encounter are when somebody did go work for their parents and we're made all kinds of promises oh I've built this up for the last 30 years so that you can come in and take it and that sounds wonderful and if that comes to pass awesome great but when you start talking about transition and in how much the parent was expecting out of that practice and how long I mean one of the issues that we see is the parent not being able to let go of the practice and like okay well I'm gonna let you buy my practice but I'm still going to work here for the next decade and I'm gonna still be the manager and so we see all kinds of problems but what we tell people is let's talk let's have a conversation especially with the other side and or with their advisors and we have this tool bag of unfortunate experiences, things that we've seen so it's not hypothetical it's real drama that we've seen play out where people ruin family relationships. They have hated their parents and held their nose as they as they signed deals we I have a client who hasn't talked to his father-in-law in a few years because of the way that they will the father-in-law wanted to manage this transition and it fell apart and he went me but as the the son-in-law went bought his own practice I mean things like that happen all the time and we just think it's so much worth having a nice awkward conversation right at the front and say these are this is where it can go if that's what you want let's just admit it right now and of course nobody wants that and so let's start talking about where these problem points are and we start going through it and I think that one of the problems that we see or again mismatch of expectations and it's nice to have especially as an attorney who just does this, it's nice to have other professionals involved because they can kind of reinforce this idea yeah mom you're expecting too much out of your practice or son you're expecting to pay too little or whatever the case may be it's just timing that awkward conversation is is worth it.

Howard: Dude I know I know 20 people who right now today haven't talked to their dad in over a decade about something that went down in fact one of the most awkward situations is that last year I was at a party at a dentist's house. He was having this party and the son and the dad were invited to different mechanisms and they hadn't talked one time in 10 years and all of a sudden they're they already was so awkward and I thought to myself I mean I got four boys I mean I would cry for a million days if one of my boys didn't talk to me for ten years and to think it was over some stupid family business. I mean I get it if you know I you know murdered his girlfriend or something but yeah but come on over business so and again I'll say it a million times the most successful people in the world are those willing to have the highest number of unsuccessful of uncomfortable conversations.

Joseph: Right, absolutely

Howard: and your hard wired to be your buddy by the way talk about your dental practice launch camp and I was hoping one day I get an online CE course out of you that'd be an awesome one I wish you online CE Course up. Do you know we put up over we got four hundred dental, 444 courses now on dentaltown and they're each an hour long and we're coming up on a million views these Millennials love to sit on their iPad on their patio and just watch an hour at a time as opposed to signing up for some all day seminar where you got to commit your whole Friday and all that but I'm hope but anyway tell them about those.

Joseph: We want to do that although it is unfortunately and like an all-day it's not an all-day seminars it's a half-day thing but what we try to do first of all we limit the number of people who can come and we try to do we try to band together people who are in roughly the same situation and we just go through and it's one huge question-and-answer session and not exactly but it effectively what's happening is we're having people just say hey you've got a morning with an attorney what questions do you have and it's kind of like how you and I are engaging and they'll ask questions and we answer them and a lot of times we try to wheel in you know maybe a banker or a CPA or financial planner or a consultant and also answer those same questions so that they can start to predict. It's for people who are with about a year or two out from making that decision whether they're gonna start a practice or or purchase one they're going to have a lot of the same questions and the rest of the day we give them a one-on-one where we if they were too embarrassed to ask a question in front of the group or whatever we give them that but that's that's what we try we do about every other month so.

Howard: Final question cuz I know your lawyer you're probably gonna send me a bill for this damn hour so my final question is I'm when a lot of times when dentist decides he's gonna sell his office he decides well you know what I'm gonna retire sixty five ninety six fine he says okay I'm gonna list my practice for sale. What do you wish that dentist would have thought about two years ago, three years ago, four years ago, before he finally shows up and wants to list his practice today and he hasn't even thought about that transition?

Joseph: Yeah I mean I think one of the so one of the good things for the buyer is one of the bad things for the seller which is a lot of times they're tapering their practice off they're they're just kind of slowing down a little bit and unfortunately that affects the price and we wish we could tell them even though it's not really a legal issue it's they are potentially leaving money on the table if they wanted to there's there ways to keep up those numbers and the efficiency of the office of not just the revenues but also the you know the profitability of the practice and make sure that there's a healthy ebitda as well there and and just make sure that they at the very least I think a lot of people invest a lot in and their time and want to get away a lot of times they're in a financial position they can go on nice vacations and shut the practice down for times of the periods of time and that might be counterproductive to the price which if you know that going in then so be it that's okay if that's your decision but if you didn't know that and now you regret it that's painful to watch and so I think that's usually the the thing we we want to do from a legal perspective there's some odds and ends that we try to inventory right at the beginning of the process make sure they're paid up and there's there's no tax liens or weird hanging out their partnership was properly closed down that they used to be a part of whatever but no I think as far as what I see in the eyes of my clients in them having regrets it's oh really that is how they value a practice well that is too bad to know that now so.

Howard: So how do my homies email you what's your what's your preferred email?

Joseph: Yeah it's J McGregor and again jmcgregor@McGregorfirm.com

Howard: See I like your other email your other emails easier Joe@jawlawpodcast.com

Joseph: That is true

Howard: That McGregor thing you just make that Joe or Joe mama at McGregor firm com or Joe law podcast by the way I called you you did not call me love your jaw law podcast and by the way I just want to say that listening to his jaw law podcasts does constitute legal advice and as a substitute for a lawyer am I am I reading that?

Joseph: Yeah that's verbatim.

Howard: Hey I want to tell you I seriously big fan of yours thanks for all that you do for dentistry thanks for helping my homies out so much because and thank you for giving me at my homies an hour of your time today.

Joseph: I appreciate it thanks so much Howard and likewise.

Howard: All right I hope you have a rockin hot day.

Joseph: Hey thanks so much Howard I appreciate it. 

 

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