Dental and Medical Counsel Blog

Becoming a veterinarian is more than just a career—it’s a journey filled with important legal and business decisions. From signing your first employment contract to eventually selling your own practice, each stage comes with key legal considerations that can shape your success. Many veterinarians focus on perfecting their clinical skills but overlook the legal aspects of their profession. Understanding employment contracts, business structures, compliance requirements, and practice sales can help you avoid costly mistakes and set yourself up for long-term growth.  

In this guide, we’ll walk through the major legal milestones in a veterinary career, starting with employment contracts, moving through practice ownership, and ending with the sale of a practice. Whether you’re just starting out or planning your exit strategy, this roadmap will help you navigate the legal side of veterinary medicine with confidence.  

Starting Out: Graduation and Employment Contracts

Graduating from veterinary school is an exciting milestone, but before stepping into your first job, it’s essential to understand the legal aspects of employment. Many veterinarians focus on salary and benefits, but employment contracts contain key legal provisions that can significantly impact your career.

Understanding Your Employment Contract

Your first contract as a veterinarian sets the foundation for your professional future. Here are the most important clauses to review:  

• Compensation & Benefits: Beyond salary, pay attention to bonuses, production-based incentives, and benefits such as health insurance, retirement plans, and continuing education allowances.  
• Non-Compete & Restrictive Covenants: Many veterinary employment contracts include non-compete clauses that restrict where you can work after leaving the job. Be sure to understand the geographic scope and duration of these restrictions.  
• Termination Clauses: Does your contract require a notice period if you want to leave? Can your employer terminate you without cause? These details affect your job security.  
• Malpractice & Liability Insurance: Some employers provide professional liability insurance (e.g., AVMA PLIT), but if not, you may need to secure your own coverage.  
• Schedule & Work Expectations: Veterinary medicine often involves long hours and emergency care. Make sure your contract clarifies work schedules, on-call duties, and overtime policies.  

State Licensing & Legal Requirements

Before you can legally practice, you must:  

• Obtain a state veterinary license (each state has different requirements and exams).  
• Register with the Drug Enforcement Administration (DEA) if you will be prescribing controlled substances.  
• Comply with state veterinary board regulations and continuing education requirements.  

Protecting Your Future

A poorly structured contract can limit your career opportunities down the road. Always have an attorney review your contract before signing to ensure you're not agreeing to overly restrictive terms. This small step can save you from major legal headaches in the future.  

Exploring Ownership: Buying or Starting a Practice 

For many veterinarians, owning a practice is the ultimate career goal. Whether you choose to buy an existing practice or start one from scratch, both paths come with important legal considerations that can impact your financial future and long-term success.  

Buying an Existing Practice

Purchasing an established veterinary practice can be a great option if you want an existing client base and operational infrastructure. However, it requires careful legal and financial due diligence to avoid unexpected liabilities.  

Key legal steps include:  

• Due Diligence: Before buying, review the practice’s financial statements, client contracts, equipment condition, and lease agreements. Uncover any hidden debts or legal risks.  
• Asset Purchase vs. Stock Purchase: In an asset purchase, you buy the physical and intangible assets (equipment, goodwill, client records) while the seller retains liabilities. In a stock purchase, you take ownership of the business entity and assume all debts and obligations.  
• Contracts & Agreements: Review the purchase agreement carefully to ensure it includes all agreed-upon terms, such as transition support from the seller and any non-compete clauses.  
• Financing & Legal Structuring: Secure funding through loans, investors, or seller financing and decide on a legal structure (LLC, S-Corp, or C-Corp) to protect your personal assets.  

Starting a Practice from Scratch

If you prefer to build your own practice, you’ll need to establish a strong legal foundation.  

Important legal considerations include:  

• Business Formation: Choosing the right entity (LLC, S-Corp, etc.) affects taxes, liability, and ownership structure.  
• Zoning & Permits: Ensure your location is zoned for a veterinary practice and obtain necessary business permits and licenses.  
• Lease or Real Estate Purchase: If leasing, negotiate favorable terms. If buying property, ensure compliance with local veterinary and environmental regulations.  
• Contracts & Compliance: Draft employment contracts, vendor agreements, and ensure compliance with veterinary board regulations and OSHA requirements.  

Navigating Veterinary Board Regulations

Regardless of whether you buy or start a practice, you must comply with state veterinary board regulations. These include:  

• Licensing requirements for you and your employees  
• Controlled substance handling (DEA registration, storage, and record-keeping)  
• Medical record confidentiality and retention laws  

Why Legal Guidance is Essential

Owning a veterinary practice is a significant investment, and legal missteps can lead to costly consequences. Working with an attorney experienced in veterinary business law can help you negotiate contracts, structure your business properly, and avoid regulatory pitfalls.  

Managing a Practice: Employment Law and Compliance

Owning a veterinary practice comes with more than just patient care—it also means managing employees, contracts, and compliance with various laws. Understanding employment law and regulatory requirements is essential to running a successful and legally sound practice.  

Hiring & Employment Contracts

Building the right team starts with proper employment agreements. Common legal considerations include:  

• Employee vs. Independent Contractor: Classifying workers correctly is crucial. Misclassification can lead to tax penalties and legal issues.  
• Employment Contracts: Clearly define job responsibilities, salary, benefits, termination clauses, and restrictive covenants like non-compete and non-solicitation agreements.  
• At-Will Employment vs. Contract Employment: Understand whether your employees work at-will (can be terminated at any time) or under a fixed-term contract.  

Employee Handbooks & Workplace Policies

A well-drafted employee handbook protects your practice by setting clear expectations. Key policies include:  

• Anti-discrimination and harassment policies  
• Workplace safety protocols  
• Paid time off, sick leave, and family leave policies  
• Social media and confidentiality guidelines  

Regulatory Compliance & OSHA Requirements

Veterinary practices must comply with workplace safety and health regulations:  

• OSHA Compliance: Veterinary clinics must follow OSHA standards, including proper handling of hazardous materials (such as anesthetic gases and sharps disposal).  
• Animal Welfare Laws: Ensure compliance with state and federal animal care regulations.  
• Controlled Substance Regulations: The DEA and state boards regulate the storage, use, and record-keeping of controlled substances in veterinary medicine. Failing to comply can lead to serious legal consequences.  

Managing Client Relationships & Medical Records  

Veterinarians have legal obligations when it comes to client interactions and medical records:  

• Informed Consent: Obtain written consent before procedures, explaining risks and alternatives.  
• Confidentiality & Record-Keeping: Veterinary records must be kept confidential and stored securely for a legally required period (varies by state).  
• Dispute Resolution: Having policies in place for handling client disputes, refunds, and complaints can prevent legal conflicts.  

Avoiding Legal Pitfalls in Practice Management 

Many veterinary practice owners face legal challenges related to:  

• Wrongful termination claims from employees  
• Client disputes over treatment outcomes or billing  
• Regulatory fines due to non-compliance with licensing or safety laws  

Veterinary practice owners who stay ahead of employment law and compliance issues protect themselves from costly lawsuits and penalties. Consulting with an attorney to review contracts, policies, and compliance requirements ensures that your practice runs smoothly and legally.  

Planning Your Exit: Selling a Veterinary Practice 

After years of building a successful practice, planning your exit strategy is just as important as starting your career. Whether you’re retiring, transitioning to a different role, or simply ready for a change, selling your veterinary practice requires careful legal and financial planning to maximize its value and ensure a smooth transition.  

Valuing Your Practice

Before listing your practice for sale, you need to determine its fair market value. Key factors include:  

• Revenue & Profitability: Buyers will assess financial statements, cash flow, and profit margins.  
• Client Base & Reputation: A strong, loyal client base and good community standing increase practice value.  
• Equipment & Facilities: The condition of medical equipment, lease agreements, and location impact valuation.  
• Employee Stability: A well-trained, long-term staff makes the transition easier for buyers.  

A professional valuation by an accountant or business broker ensures you price your practice competitively.  

Structuring the Sale: Asset Sale vs. Stock Sale 

There are two primary ways to sell a veterinary practice:  

• Asset Sale: The buyer purchases the physical and intangible assets (equipment, client records, goodwill) but not the business entity itself. This is the most common type of sale for veterinary practices, as it limits the buyer’s liability for past debts.  
• Stock Sale: The buyer purchases ownership of the business entity, taking on all assets and liabilities. This is more common for corporate buyers or partnerships.  

Each option has different tax implications, so consulting with a financial advisor and attorney is essential.  

Legal Considerations in the Sale Process  

Selling a practice involves multiple legal documents and agreements, including:  

• Letter of Intent (LOI): A non-binding agreement outlining key sale terms before due diligence begins.  
• Purchase Agreement: The final contract that details the sale price, assets included, transition timeline, and seller obligations.  
• Non-Compete Agreement: Buyers often require sellers to agree not to open a competing practice within a certain radius for a set period.  
• Lease Assignment or Real Estate Sale: If you lease your space, you may need landlord approval to transfer the lease. If you own the property, you’ll need to decide whether to sell or lease it to the buyer.  

Transitioning the Practice to a New Owner

A successful transition benefits both the buyer and your longtime clients. Consider:  

• Introducing the New Owner: Clients and staff need reassurance that the practice’s quality of care will continue.  
• Training & Support: Some buyers may request that you stay on for a transition period to help with patient continuity and operational guidance.  
• Handling Outstanding Liabilities: Ensure all outstanding debts, contracts, and employee obligations are addressed before closing the sale.  

Why Legal and Financial Guidance Matters

Selling a veterinary practice is a complex process with significant legal and financial implications. Working with an attorney and financial expert ensures that your sale is structured to protect your interests, minimize tax burdens, and provide a smooth transition for all parties involved.  

Conclusion: Navigating a Successful Veterinary Career 

A veterinarian’s career is more than just practicing medicine—it’s a journey that involves critical legal and business decisions at every stage. From negotiating your first employment contract to managing a thriving practice and eventually planning your exit, understanding the legal landscape helps protect your interests and ensures long-term success.  

By taking proactive steps—securing strong contracts, staying compliant with regulations, and seeking professional legal guidance—you can avoid costly mistakes and focus on what truly matters: providing excellent care to your patients. Whether you’re just starting out or preparing to sell your practice, having a solid legal strategy in place will make all the difference.  

Contact Dental & Medical Counsel for Legal Guidance on Your Veterinary Career

At Dental & Medical Counsel, we have extensive experience helping veterinarians navigate every stage of their careers, from reviewing employment contracts to purchasing or selling a practice. Whether you're negotiating your first associate agreement or planning your exit strategy, our team is here to help you protect your assets, mitigate risks, and build a successful future in veterinary medicine. Contact us today to speak with a member of our team about your legal needs.

Frequently Asked Questions

Q: What should I look for in my first veterinary employment contract?
A: Pay close attention to salary structure, benefits, termination clauses, non-compete agreements, and malpractice insurance coverage. Having an attorney review your contract ensures fair terms and protects your future career.  

Q: Do veterinarians need malpractice insurance?
A: Yes, malpractice insurance (professional liability insurance) protects veterinarians from lawsuits related to professional errors or negligence. Some employers provide coverage, but independent vets or practice owners may need their own policy.  

Q: How do I know if I should work as an employee or an independent contractor?
A: Employees typically receive benefits and tax withholdings, while independent contractors have more flexibility but must handle their own taxes and insurance. Misclassification can lead to legal and tax issues, so it’s important to clarify your status in your contract.  

Q: What legal steps are involved in buying a veterinary practice?
A: Purchasing a practice involves due diligence, negotiating a purchase agreement, securing financing, reviewing existing contracts, and ensuring compliance with state veterinary and business laws. A veterinary attorney can help navigate the process.  

Q: What are the key employment laws veterinary practice owners must follow?
A: Veterinary employers must comply with wage and hour laws, workplace safety regulations (OSHA), anti-discrimination policies, and proper employee classification. Having a well-drafted employee handbook helps ensure compliance.  

Q: How do I protect my veterinary practice from legal risks?
A: Maintain proper employment agreements, follow state licensing requirements, comply with OSHA and controlled substance regulations, and ensure patient records are kept confidential. Regular legal checkups with an attorney help prevent future issues.  

Q: What’s the difference between an asset sale and a stock sale when selling a veterinary practice?
A: An asset sale transfers only the business assets to the buyer, while a stock sale transfers ownership of the entire entity, including liabilities. Most veterinary practices are sold as asset sales for liability protection.  

Q: Do I need a non-compete agreement when selling my practice?
A: Most buyers will require a non-compete clause, preventing you from opening a competing practice within a certain distance for a set period. The terms should be reasonable and reviewed by an attorney before signing.  

Q: How long does it take to sell a veterinary practice?
A: The sale process can take anywhere from several months to a year, depending on factors like practice valuation, buyer financing, and lease negotiations. Proper planning helps ensure a smooth transition.  

Q: Why should I hire a lawyer when transitioning through different stages of my veterinary career?
A: Legal guidance helps veterinarians avoid costly mistakes, whether it’s negotiating employment terms, ensuring compliance as a practice owner, or structuring the sale of a business. Having legal support ensures that your interests are protected at every stage. 

About the Author

At Dental & Medical Counsel, we've been instrumental in realizing the practice goals of countless veterinarians. Whether you're looking to purchase, launch, or sell a veterinary practice, our expertise is your guide. Beyond the initial stages, we're committed to ensuring your veterinary practice remains legally compliant.

We provide comprehensive support, including employment law protections, veterinary contract reviews, and assistance with veterinary employment agreements. Additionally, we specialize in incorporating veterinary practices and securing trademarks. And for long-term planning, our services extend to helping veterinarians with succession and estate planning. Trust us to be your partner in every step of your veterinary practice journey.

About Ali Oromchian, Esq.

Your Veterinary Lawyer

Ali Oromchian, JD, LL.M. is the founding attorney of the Dental & Medical Counsel, PC law firm and is renowned for his expertise in legal matters

Ali Oromchian, JD, LL.M., is a leading legal authority in dental law and the founding attorney of Dental & Medical Counsel, PC, with over two decades of experience. His deep connection to dentistry comes from his wife's nearly two-decade-long career as a pediatric dentist. 

This personal insight fuels his dedication to empowering dentists to navigate their legal challenges and achieve their practice goals. In doing so, Ali has helped thousands of doctors open their practices while maintaining legal compliance. 

Ali is frequently quoted and contributes articles to dental publications, including the California Dental Society, Progressive Dentist, Progressive Orthodontists, Dentistry Today, Dentaltown, and The New Dentist magazines, further showcasing his commitment to the dental community.