Episode 123 - Recent Developments: Federal Non-Compete Ban? DSOs in the Current Market

The Dental Amigos are back!  Rob and Paul discuss recent developments in the dentistry world regarding the prohibition of covenants not to compete in the employment context by the Federal Trade Commission (“FTC”).  This federal non-compete ban by the FTC has been controversial spurring lawsuits that challenge the constitutionality of the ban, resulting in a court order that stopped the FTC from enforcing the ban.  The FTC is considering an appeal.  While some states have banned non-competes within their states, the prohibition on a federal level remains controversial and will continue to play out.  With most associate agreements containing non-competes that prevent dentists from providing competing services within a specified geographic area both during an associate’s employment and for a period of time after leaving employment, this issue is getting a lot of attention in the dental world.  The Amigos discuss the value of a non-compete, the limitations that a non-compete ban would impose, as well as the impact that a ban would have on the greater economy.   The Amigos also discuss what’s happening with DSOs.

Listeners who want to reach out to Paul can do so at Paul@DentalNachos.com and those who want to reach out to Rob can do so at Rob@RMontgomery-Law.com.

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Full Episode Transcript

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Bumper  00:00

Welcome to the Dental Amigos Podcast with Dr. Paul Goodman and attorney Rob Montgomery, taking you behind the scenes of the dental business world. All the things you didn't learn in dental school, but wish you had. Rob is not a dentist, and Paul is not a lawyer, but since Rob is a lawyer, we need to tell you that this podcast is for informational purposes only and shouldn't be considered legal advice. Listening to this podcast does not and will not create an attorney-client relationship. As is always the case, you should formally consult with legal counsel before proceeding with any legal matter. Learn more about the Dental Amigos at www.thedentelamigos.com. And now, here are the Dental Amigos!  

Rob Montgomery  00:39

Hello everyone. I'm Rob Montgomery, and I'm joined, as always, by the Head Nacho himself. Dr. Paul Goodman.

Paul Goodman  00:45

It’s great to be talking Rob.

Rob Montgomery 00:46

It's good to see you, Paul. Welcome to another episode of the Dental Amigos. We are back after a long hiatus, longer than we thought it would be, Paul.

Paul Goodman  00:57

Little break in the casting, but excited to be back.

Rob Montgomery 00:59

Here we are, Episode 123. That sounds like kind of like a lucky number.

Paul Goodman  01:04

Yeah, it's a good one to start back with.

Rob Montgomery 01:06

So while we've been away, lots has happened in the dental world, and so this will be a bit of a State of the Union for dentistry. We'll talk about some things that are going on, some recent developments. We'll talk about some questions that we get asked a lot at my firm, and you've got a bunch of questions that are probably common themes for the Dental Nachos gang as well.

Paul Goodman  01:35

Yeah, things we should pay attention to and kind of reinforce our message, get good information from people who do things every day. It's great to be on my Facebook group asking questions and learning, but as we've shared multiple times, get help from professionals when you're making big career decisions. And I'm sure that's going to be part of the theme of the day.

Rob Montgomery 01:53

Yeah, absolutely. And Paul, as we sit here recording at the end of June 2024, how many members are in the Dental Nachos community?

Paul Goodman  02:01

We're about to approach 57,000, and you were there from the early days, February 2017 to 57,000. We call them dentists and humans because it's for dentists, students, people married to dentists, advisors like yourself. We really try to be a community that cares and has the conversations that are necessary for dentists to do three things, Rob: survive, thrive, and not cry in the dental world.

Rob Montgomery 02:24

And if you can make two out of three, on most days you're doing okay. Well, the group, it goes without saying, is an awesome resource. And thanks for all you do, Paul, for dentistry, really, all you do in that community. So the first thing I want to talk about is a very common question these days, and something that I think there is great misunderstanding and bad, bad information being peddled out there, which is the FTC rule banning covenants not to compete.

Paul Goodman  02:59

Let's do this. Rob, even though this is a theme we've talked about since episode one, two and three, just share it with dentists, because you are the attorney here. What is a non-compete, or restrictive covenant? Someone gets handed an agreement and it says something like "restrictive covenant", or "non-compete", right? Break that down for us.

Rob Montgomery 03:18

So, a non-compete is a type of restrictive covenant. So generally speaking, we're going to go into the law lecture here. Everybody goes to law school for this episode for the next five minutes. They are what are known as restrictive covenants. And that is just a general umbrella for anything that you agree, you promise, you covenant, not to do. And so, these are things that are restrictions. And there are different types of restrictive covenants. There are covenants not to compete. There are non-solicitation covenants. So in the dental world, that's non solicitation of patients, referral sources, or employees. So a non-compete is a type of restrictive covenant, and most associate agreements contain some sort of restrictive covenant, especially non-competes in states where they are permitted.

Paul Goodman  04:13

And this would be something like after you finish working here, you cannot open an office or practice within a certain mileage, correct?

Rob Montgomery 04:22

Or while you're working. So typically: while employed and for two years after, Employee (associate dentist), agrees to not work within a 15-mile radius of the practice. That would be an example.

Paul Goodman  04:37

I want to use a technical term, so 15 miles could be Nacho Nuts in some areas but totally normal in others, right?

Rob Montgomery 04:45

15 miles would be Nacho Nuts in Manhattan, and it would be pitifully small in Wyoming, for example. It depends, on the area, the density, population density, the number of dentists, etc. So in different places, you could expect it to be described differently. So, for example, in Manhattan, you may be talking about river to river, eight blocks, in either direction, for example. In Philadelphia, sometimes we talk about it once again, river to river, Delaware River to Schuylkill River, Washington Avenue to Spring Garden Street. What we've referred to as the quote-unquote "Papal Grid." For those of you who are not in the Philadelphia area, that was the boxed-off area of Center City, Philadelphia, when the Pope came to town that you couldn't enter.

Paul Goodman  05:41

I was supposed to be able to rent my apartment for a million dollars a night. It didn't work. I didn't get to retire.

Rob Montgomery 05:44

Yeah, yeah. But there were like armored personnel carriers and military and National Guard kind of guarding the grid there. And you couldn't drive through, you couldn't park, it was crazy. So yes, the "Papal Grid", Paul, that would be how you describe it here. And then again, rural areas, suburban areas, you're generally talking about a radius of miles. There are some other nuances to this, especially if you're an associate working a in a group practice or for a DSO. Sometimes that mileage may be measured from all of the practices that that employer owns, or all the practices where you may have worked for some period of time, or any period of time. The devil really is in the details with these things.

Paul Goodman  06:30

And I would just share that as we dig into this, we'll talk about the updates and the news. But when I was a dental practice broker, maybe an update is I've totally retired from that. If anyone wants to ask me about that, I'm still involved, but I'm retired. I like to say I used to play on the field, but now I'm in the announcer's box. It's much more comfortable there. But I talked to a young dentist once who said, I really want to see this practice, Paul, that you have for sale in the area. And I said it's in this area. He goes, oh my gosh, that's in my restrictive covenant, which, let's say is 10 miles. And I said, which attorney let you sign a contract with a 10-mile restrictive covenant? Because it was larger than what was normal. And he said: I did not have an attorney review my contract. So some of these things can come back to bite you in your next decision of buying a practice. And Rob, you've been giving lectures well before the Facebook world to my residents. When a dentist says, "Well, it doesn't matter, they're not going to hold up in court", you're still going to lose out on that.

Rob Montgomery 07:24

Yeah, some bad information there too. So yeah, they could. And to find out whether or not a non-compete "holds up in court" or is enforceable, that means that there has been a trial. To get to that trial, there's been a lot of money spent, possibly six figures or more, in legal fees. There was a lawsuit filed, an answer filed, there was a hearing on a preliminary injunction, there were depositions, discovery motions, and a trial.

Paul Goodman  07:54

And by that time, that practice is now gone. Practice is sold to somebody else. No seller's waiting for you to go into court and you can't handle the truth litigation by your restrictive covenant. To use my grandmother's term, there's been a hubbub, there's been a commotion. So tell us, Rob, since our hiatus, what has happened with the FTC? They're in the news about this topic.

Rob Montgomery 08:05

Even if you're doing a startup, tell a landlord: "I love this space. Let me get back to you in a year after I'm finished litigating with my employer over the reasonableness of my non-compete." But it almost doesn't matter, Paul with all this too, because, again, it isn't decided whether or not it's enforceable until there's been a final ruling in court. But even if you were crazy enough to buy a practice or do a startup in an area that you're restricted from, banks aren't going to lend you the money because they don't want to give you a $700,000 or $1,000,000 loan to find out that the sheriff showed up for the grand opening and served you with a cease and desist order. Now you can't operate the practice and you owe the bank a million dollars. So the bank's interest and the practice owner's interests converge when it comes to that. So you know, again, as you said, when I see people say, "Don't worry, that'll never be enforceable." That is horrible advice.

Rob Montgomery 09:18

So now, there's even more fodder for "don't worry now, because the FTC rule ruling came out, and these things aren't enforceable anymore." Not true. So the FTC passed a rule a few months ago saying that non-competes are prohibited. That rule becomes an actual regulation that goes into effect in September of this year, September 4, 2024. However, right after that was filed, or the rule was published, lawsuits were filed, and litigation ensued. Specifically, a global tax service, Ryan, filed a lawsuit to stay or to vacate that rule. The US Chamber of Commerce also filed a lawsuit saying that the rule is not constitutional.

Paul Goodman  10:18

So tell me, Rob, because I know dentists.  We think the world revolves around us, but they didn't make this rule about associate dentist number four at a group practice, they made this rule for all non-competes. So, just so I can be clear. Why did Ryan do this? Why did the Chamber of Commerce do this? These are not dental practices, right? Why did they say hey, this is not okay?

Rob Montgomery  10:42

Well, generally speaking, it has the potential to cause chaos somewhat in the business world. Specifically, there is a fear that trade secrets and confidential information can be easily shared or taken from one employer to another. If people have the ability to freely go between competitors in the workplace, they have the ability to take confidential information with them. Relationships, goodwill, which is what, when we look at dental practices and talk about transitioning dental practices, that's what we're transitioning. Goodwill and patient relationships. And whether or not that is a "confidential" piece of information or not is debatable. But the reality is, even if you say you can't disclose it, it doesn't change the fact that it is a very portable thing that the associate who has good relationships with the patients in the practice is able to go across the street, and then it's very easy for those patients to find that person and continue to treat with them.

Paul Goodman  11:07

So now, what does this mean?

Rob Montgomery 11:45

So it's in limbo. My legal opinion (as Dan Marino says at the outset, we're not giving legal advice here), is that this is not going to be enforceable. The irony is that the rule will not be enforceable, that it will be vacated, and that this regulation will be found to be unconstitutional because it's very dubious at best that a federal agency is able to essentially make laws that states have to follow. If you remember the Saturday morning cartoon, "I'm only a bill sitting here on Capitol Hill." There's a whole process of how you can make laws in this country. And the FTC is just a regulatory and administrative agency. They are not lawmakers. They are not the Congress of the United States.

Paul Goodman  12:43

This was supposed to happen on September 4. It's not going to happen on September 4, right?

Rob Montgomery 12:47

So, the lawsuits were filed, and motions for preliminary injunction were filed. Again, ironic, in a non-compete case, that's where you go. There have been lawsuits or motions filed to prevent or stay the enforcement of this, which means it's on hold until further notice. They were filed in early May, the court has said that they will rule on those motions for preliminary injunction sometime on or before July 3. So we're probably going to hear something in the in the near future from the court, and I suspect that it's going to be that the enforcement of this rule will be stayed or delayed pending the final adjudication of this lawsuit, which is then probably going to be appealed. So realistically, we're probably at least 12 to 18 months away from some sort of final word.

Paul Goodman  13:44

So if you're an associate dentist who's getting a contract tomorrow, don't sign a Nacho Nuts non-compete and hope that you can send a link from Google about the FTC lawsuit.

13:54

Amen, absolutely. And we get more than a few calls and emails where people say, "Yeah, I've got this non-compete, but I'm not even going to worry about that because the FTC banned them." No, not really.

Paul Goodman  14:06

So tell me, Rob, you do our contracts and agreements. When does a non-compete make sense? Pull back and say, hey, you own two dental practices, Paul, even if you came to me and said, I don't want to have any restrictive covenants for my associates. When do they make sense for practice owners?

Rob Montgomery 14:27

Well, it makes sense to protect the relationship and protect the patient relationships, and also preserve the goodwill of the practice. And when you preserve the goodwill of the practice, that's the value of the practice, as you know, back in your old broker days. Plus, we look at the allocation of the purchase price, and approximately 85% of the purchase price is allocated towards goodwill, which are these patient relationships. So essentially, that's where the value is in a dental practice. And so if you are Mr. Nice Guy, or Mr. Nice Woman who says, "I like to have handshakes with my associates, I don't want them to have non-compete." The practical effect may be that somebody is going to buy your practice and say, "Look, your associates are producing half of the dentistry. And you're telling me, I can pay you $2 million for this practice, and half of the patients could go across the street with this associate." So, no good deed goes unpunished. Now, one caveat is that there are states that already have banned them. So places like California, Oklahoma, and a few other states where they are illegal. And that's okay, states can make laws to say what's legal in their state. The problem here is a federal regulatory agency is telling the states what's what's legal.

Paul Goodman  15:55

I'm curious, if a non-compete is banned, there still could be the non-solicitation in effect, right?

Rob Montgomery 16:04

So there could be non-solicitation clauses, absolutely. This is dealing with non-competes in the employment context. There are some exceptions that seemingly don't really apply to the dental world, which we don't need to get into for high-earning executives who have the ability to control decision-making in the organization. I think a creative lawyer would argue that an associate has those authorities, but for these purposes, assume that they don't apply here. So we're talking about non-competes only, not those other restrictive covenants. The non-solicitation of employees, referral sources, and patients, stays in effect. And also, this is only in the employment context. This does not impact non-competes that are in connection with the sale of practice. So if you are selling a practice, regardless of what the FTC does or how this rule ends up after the litigation, this does not pertain to or alter the fact that sellers would still be bound by these.

Paul Goodman  17:19

They couldn't come and open up next door, this is for employment things. Well, sounds like a "stay tuned", and it'll be a continued thing we'll touch on throughout these episodes. As someone who's been on all sides of this, it's just so key to get the right people reviewing your agreements on both sides, to make you aware of what you're signing and how it's going to impact you.

Rob Montgomery 17:39

So yeah, business as usual for the foreseeable future on this issue, regardless of what people chime in on blogs and even the greatest of Facebook groups. I do see violations of this, Paul, where people say, "Don't worry! The FTC says!"

Paul Goodman  17:52

From a public service standpoint, I get DMS all the time, Rob, saying "I want to leave XYZ DSO", "I want to leave this practice", and "There's an early termination notice of $1,000 a day. It's 90 days. If I leave, Paul Goodman, will I have to pay it?" I wrote back "I'm a dentist, just like you. What did your attorney say? Who reviewed the contract?" And that's where I get the pause. "Oh, they didn't." Attorneys looking at your agreements help you become aware of what you're signing, not necessarily to negotiate it for your year and a half, but if you want to buy a practice in the area, there's probably some risk of having a job next door. Those are the decisions that attorneys help you make.

Rob Montgomery 18:34

You're absolutely right. That's a misconception that people have sometimes, especially in DSO contracts that may "not be negotiable." I think sometimes people say, well if it's not negotiable, why do I need a lawyer? Well, you need a lawyer to tell you what it is you're signing yourself up for. It's not like movies and TV where the lawyer's only job is to negotiate the best possible deal. Sometimes they have to tell you what the heck you're agreeing to. And that's even more important than whether or not you can negotiate that or change it. That's the next step. But understanding what it is in the first place and what it's not is key before you even get to the negotiation stage. All these agreements, any agreement, I tell young dentists that up to this stage of their lives when they're taking their first associateship or job earlier in their career. These are, these are grown-up contracts. This is no longer the college apartment rental agreement or the lease for the Subaru, these are contracts that can be impactful. They are. There are no ground rules for them. It's the Wild West, and anything could be in them. Unlike those other agreements where with residential leases or car leases, or any of those sorts of "standard" agreements, those have all been vetted. There are special consumer protections that need to be followed. There is no sort of dental associate protection law that says you can't put this kind of thing in an agreement, and that's what people really need to understand. Okay, ow contracts matter. The Associate Agreement, the lease for your startup, the Partnership for the buy-in that you did with the DSO, the asset purchase agreement for the practice that you're going to buy, all this stuff. These are grown-up contracts, and they have to be treated with the greatest importance.

Paul Goodman  20:47

Awesome message.

Rob Montgomery  20:49

So DSOs Paul. Since we last tuned in, interest rates have gone through the roof.

Paul Goodman  20:54

Break this down. In case you're listening for the first time, both of us work with private practice dentists and DSOs every single day. They are on the same nacho plate, right? And we have done events, we've done podcast work, but just explain to us. How have interest rates impacted DSOs' appetite for expansion?

Rob Montgomery 21:20

Well, most DSOs are borrowing money. There are some that are playing with somebody else's pot of money. But even with that, all money comes at a cost, basically, and the cost of money has increased. So as the cost of money increases, the cost of borrowing. It is more expensive to get the money to buy practices. That happened to coincide with inflation. We all see increases in overhead and expenses in our lives and in our businesses, so that, with a somewhat slowing economy at times, all those factors kind of teamed up to really squeeze that DSO transition.

Paul Goodman  22:05

So let's talk about what your thoughts are on the 52-year-old owner who has a $1.8 million dental practice, and thinks, I'm going to sell it to a DSO and be rich and move to an island. You talked at my event where we had about how you have to really dig into that thought process because you sell your $1.8 million practice to a DSO, something really good has to happen at the end with a recap to get that right. Have they been on a recap pause as far as you can tell?

Rob Montgomery 22:35

Yes, things have slowed dramatically with that. And I think what we're also seeing is the sort of Darwinian situation with DSOs. There has been no shortage of DSOs that have, frankly, gone out of business. The big players, the people that have the infrastructure, the groups that know how to run and manage practices, are still in business, and they always will be. But the folks that got into the space to basically consolidate and flip it, may not have the wherewithal or the infrastructure to hang on and run these into the future. So this is the gang that, generally we're talking about, Paul, sometimes referred to as the "emerging DSOs", right? The ones without a track record, and they're backed by private equity groups that own a chain of steak houses in Oklahoma, a medical uniform company in Wisconsin and Minnesota, and then, whoa, they own a bunch of dental practices in the Maryland, Virginia area, right? Like it's just another business line for them and they are not professional dental practice owners or managers, and those groups are getting squeezed. But as interest rates go up, it's just like anybody who's buying a house, how much can you afford? What can you afford? Well, here's what the monthly payment is, with the interest being this, the higher the interest, the lower you can afford to pay for the purchase price because the monthly payment is going to be higher. So the same thing's happening. And unlike dentists - Paul, if your practice dipped 10% in the next three quarters, it'd be a bummer, but the lights aren't going to go off, right? I mean, you and Jeff are still going to do your thing. Yeah, you're going to make a little less money. You're working a little bit more, and you're going to make it happen. Yeah? When you're talking, a lot of the DSOs are absentee owners, and it's harder to run an absentee business when the cash flow dries up.

Paul Goodman  24:39

As you've been talking about this, this is something we'll just dig into. As someone who plays so many roles in this world, the DSOs are hiring new dentists that were trained during the pandemic and after and they don't always have the skill set to replace these retiring roles. At Dentist Job Connect which I love doing, we've done some fun videos with you know this older owner of a DSO being like, "I'm ready to go." And there's a regional director being like, "Don't go yet", right? And they're trying to replace someone who maybe they produce $70,000 a month, which is not an unreasonable amount of production. But if you have someone new out of dental school trying to do that without patient relationships, without training, there is a missing link.

Rob Montgomery  25:23

I had someone tell me once that they were going to assemble a group practice through de Novos. They're going to do 15 de novo practices in the next 18 months, or something. That sounds ambitious. Who are the dentists? I'm just going to hire some dentists, just any old dentists?

Rob Montgomery 25:42

As much as I think so, I think deals have slowed down. The larger deals have slowed down. They're still happening. But the incubation period and the due diligence period have increased. Things have fallen through that otherwise wouldn't have fallen apart, but that sort of in-between space where somebody has a practice that's worth $1 million to $1.6 million, for a while, DSOs were grabbing those practices up and that was a shame, because they were good practices for a dentist, right? And so now, with the DSOs retreating a little bit in that sector, there are just more opportunities for dentist-to-dentist deals. So I do see an opportunity.

Paul Goodman  25:42

Anybody who says that has no idea what it's like to work with dentists because it's like working with chefs, where they do the work at the table in front of the patient, right? And you may be able to train chefs in a restaurant at scale, because the customer's not watching you make their pasta or their nachos, right? And not saying, "Not this way, we'll do it faster." But in dentistry, it's really just so difficult for the newer generation of dentists to get clinical reps. And it's normal, right? I don't want to say prior to DSOs, but still, in the end, Jeff and I have two associates. We train them daily. Jeff does now that I'm not there as much, and they get a lot of owner TLC, right? And then, if you're a new, new dentist at a DSO at one location by yourself, it's missing any TLC. So I think what I want to ask you next is, has that created any unique opportunity for some private practice transitions other than this? I'll share with you as someone who has people joining the group from before dental school, all the way to what I call A RAD, a retired age dentist. Alan Stern, we'll give him a shout-out. I have a whole circle of life, no matter what the interest rates are. Rob, I want to tell you, that dentists are still pretty exhausted, right? So that 57-year-old who said, maybe I could do a DSO, they might say, let me just sell my $1.4 million to a private practice dentist to be done. And I think that's an opportunity out there for dentists.

Rob Montgomery  27:53

For sure, and even the "best of DSO times" for a dentist to sell their practice for roughly that amount and that price range there, that's a deal that frequently doesn't make sense to the dentist. From an ego standpoint, it's great. There it is on the Letter of Intent, there it is on the documents: $1.4 million. Hey, I'm selling for $1.4 million! But once you start to chip away at what, the concessions that seller has to make, the delta between being paid like an associate versus like an owner over a four-year period, other perks and things, now it starts to chip away at that number. When is one and a half million dollars, not one and a half million dollars? When you're selling to a DSO. And so, those deals, at least in my observation, not always, but rarely did they make sense. Even in the best times.

Paul Goodman  28:54

I could see that. And then just to kind of complete it, could maybe help our audience. As, you know, I'm part of the Mark Costes Dental Success Institute with Jeff, and I get to meet all these great owners. There are some pretty amazing practices out there across the country. As a solo dentist, let's say they're doing $2.8 million by themselves. Is there another side to this where it's hard to sell a certain size practice?

Rob Montgomery  29:18

Totally. I mean, once you get up into that realm, you start to limit your buyer pool significantly. And now you're looking at other dentist groups that have the resources, or DSOs. It's hard.

Paul Goodman  29:33

I'll share this too, Rob, and I know it's what I do every day with Job Connect. You also can incorporate an associate, do less dentistry, make a little less money, but also have this income-producing asset that you can have for a long time, for the next 10 years, right?

Rob Montgomery  29:34

And you could still be an owner, a 50% owner, instead of being the associate working for the DSO, making $400,000 less a year for the next five years.

Paul Goodman  29:58

I'm totally with you.

Rob Montgomery  30:00

So, a great development, Paul. Big news, I saw it on Facebook, and I had to look twice. And at first, I thought it was a gag. If it was April 1 I would say for sure this is an April Fools. Dr. Paul Goodman was at Penn Dental School speaking to dental students.

Paul Goodman  30:21

So the backstory, I went to Penn Dental School, and I graduated in 2002. I always loved teaching. I created a course called "I'm a Dentist: Now What?" which was a Saturday selective. I feel like maybe Rob you were part of that along the way, maybe you popped by and I said, "Here's what dental school is like." So from about 2007 to 2017, I gave this course, it was great, pre-Facebook time. Then without getting too into all the details, some of the leadership at Penn no longer wanted me to be involved in teaching, even though this was literally Rob, the dental school down the street. So I'm flying to other dental schools, being asked to come in, but my own dental school, my own backyard, I was not welcome. But then one of these dental students was able to get me through, and I went there and gave a very nice talk on how to find your first job and things you should pay attention to. I made them aware/scared, I call it responsibly concerned, other words for scared, of signing contracts. And it really was nice. It was, it's a good energy to be around D3s and D4s who are just so desperate for what happens after dental school. I give dental school a lot of grief. I think they could do things better and it's actually really hard to train people to know everything in four years. You know, the whole dental school model is different than the medical model. You know, doctors follow around bigger, stronger doctors, even lawyers, who follow around bigger, stronger lawyers. Jeff Jones was like, "Okay, go enjoy your life now", right? So I know their job is tough. The thing is, I think it's great when they incorporate some real-world awareness because it's coming at them fast. So that was great. I even stopped at Smokey Joe's and took the picture, you know, the famous Penn bar. So I really was glad to do that. And it's kind of amazing. I'm involved in helping dental students across the country in all different ways. And I think while they're not lucky to have the debt level that they have, they are lucky to have resources in their phone. FIPS, friends in your phone. Develop friends in your phone, resources who you can learn from, listen to because the dental world is wild. It's wacky, it's exhausting. And if you don't get on the right path to start, it could just be so overwhelming. So it was a fun development to be there.

Rob Montgomery  32:31

It's awesome you did that and we see that some schools do it well. At Louisville, Dr. James Harrison's got a great program that he rolls out and we have other friends and colleagues that have similar situations.

Paul Goodman  32:47

And it's fun to do those things.

Rob Montgomery  32:50

That place is great. I spoke there in Arizona a few years ago, and it was funny, D3s and D4s, and somebody raises their hand in the back and they're talking about this. LOI that they had signed and they're a D3 like, how could you have a Letter of Intent in your third year of dental school? I mean, that is, that is, hands down, the most entrepreneurial dentist.

Paul Goodman  33:12

specialty programs. And they have a great thing that I want to I think that place

Rob Montgomery 33:15

That place is great. I mean, to me. I mean, as the layperson, the lawyer who observes the dental world, there's so much value in that kind of program. I mean, without a doubt, people come out of there. They're the guy.

Paul Goodman  33:27

Without a doubt, they're ready to move. I mean, we were just talking about someone who's on a podcast. The thing I'd like to share, and even if we pull this out for our clip, is what bothers me is some of these institutions say, oh, we can't have an attorney, and we can't have an accountant, and we can't have the nacho guy, and they might, you know, buy something from you, or how do we know what you're selling? These are people, Rob, who have made the decision to take out $600,000. Why are we protecting them from other decisions they need to make in their career? So the schools that get it, like you talk about Louisville or Midwestern they say, come in, other voices, teach our students, help them, right? I actually think it's something you should ask on the dental school interviews. What other things do you learn? Because they're taking out all this debt, and then if the school does not let them learn anything else while they're there, they start their career, I think, in a not an advantageous place.

Rob Montgomery  34:14

Oh, no doubt. No doubt. And so yeah, that leads us to our final topic here for the show, dental school debt. Since we last tuned in, it has not gotten any cheaper, as you said. There are certainly challenges with what that training looks like now in dental schools, and as far as opportunities for employment and pressure all around and on top of that runaway student debt.

Paul Goodman  34:46

Two things I want to say about this, I've done some polling on this on Instagram and Facebook, and it'd be great if the ADA did some things. I said, would you take out $700,000 to get a degree in general dentistry? End of the day, you're going to school for four years, and you leave with a general dentistry degree. I know you have clients who are oral surgeons periodontists and endodontists, and they can do amazingly well financially.

Rob Montgomery  34:47

I had somebody once say to me and we were talking about student debt, and I said, don't worry, you could still buy a practice. He's like, I have a lot of debt. Like, yeah, yeah, everybody does. He's like, No, really, I have a lot of debt. And it was an Ivy League undergrad, yeah, Ivy League dental school, Ivy League medical school for an LMS. And it was like, $1.1 million like, whoa, you do have a lot of debt.

Paul Goodman  35:29

And I think debt is an emotional number, and I think we should remember this. These are 26-year-olds who wake up and look at a statement on their computer that says they owe $700,000 and even though we've had episodes with my sponsor, Travis Hornsby, student loan planner, that's still an emotional thing. Well, it's a lot of money. And the other thing I'll say about this is most of the people in the survey said they know they would not take out $700,000 but then some entrepreneurial people say, well, the ROI of my degree because I make $400,000 a year is, you know, 20 years, $8 million, of course, I do it. And they go, Oh, where do you practice? They say I practice in the Midwest, where it's one dentist in every 3,000 people. So one thing I'll share is, you know news from Job Connect is, Rob, you're familiar with the Main Line area of PA, I'm sure. My dental school classmate advertised a job there. And I said, hey, dental school classmate, could you please fill out the ad properly? And she said I don't have time. I'm just gonna put to work for a fee. First office in the Main Line. Okay, 26 applicants in a month. Over in Illinois, this is, you know, a poignant story replacing a dentist who sadly passed away. They can make $384,000 a year, a track record. One, one or two applicants. So one of the things I think everyone should be aware of is the ability to find jobs where many dentists want to live is getting more and more competitive. And then these other opportunities, I'm sure you see them. Dr. Arashimati, one of our best clients, he takes dentists from Job Connect and brings them to Missouri. But in other areas, if you're willing to be geographically flexible, the economic opportunity for dentistry can be amazing. But I don't think a lot of people went to dental school, me included Rob, thinking that they were going to have to uproot their whole life and leave their friends and family. So I think that's where this kind of debt, competition for jobs things are going, and I think it's something we should all pay attention to, I loved it. Rob, awesome.

Rob Montgomery  37:20

It just makes it more important to make good, informed decisions, because they have consequences. Alright man, it's good to be back. Thanks everybody for listening.

Bumper  37:31

Thanks for listening to another great podcast with the Dental Amigos. And don't forget to tune in next time to have the dental business demystified. If you're looking for more information about today's podcast, you can find it on thedentalamigos.com. If you're looking for Paul, you can find Paul at drpaulgoodman.com and if you're looking for Rob, you can find him at yourdentallawyer.com This podcast has been sponsored by Orange Line Media Group, helping dentists and other professionals create content people love. Find out how we can help you take your business to the next level at www.orangelinemg.com. Until next time.

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