How to Read Your First Physician Employment Contract

Your first attending contract arrives as a PDF. It is somewhere between 20 and 50 pages. The first sheet has a number on it that, after the last seven years, is genuinely life-changing — a base salary larger than your parents' household income, larger than anything you have ever earned. The rest of the document is dense legal language nobody taught you to read.

If you are reading this as a resident or fellow staring at your first offer, the first thing to know is that the feeling is correct. This is the most financially consequential document you will sign in your career. The decisions buried in its pages will compound for the next decade. And medical training, for reasons that are not your fault, never covered how to evaluate it.

This guide is the version somebody should have given you. It is written for the physician seeing their first contract, with no prior experience negotiating, who wants to understand what actually matters before they sign.

The three things that matter most financially

Most physicians, reading their first contract, focus on the base salary number. The base salary matters. It is also the most negotiated, most market-competitive, and least variable component of total compensation across employers. The structures underneath it are where contracts diverge — and where money is made or lost.

1. Base salary plus how wRVU targets affect total comp

Most employed physician contracts include a base salary that is conditional on hitting a productivity target — usually measured in wRVUs (Work Relative Value Units). The contract may guarantee $250,000 "contingent on production of 4,800 wRVUs annually," or pay $235,000 base with a per-wRVU bonus above a 5,200 threshold.

The critical question is not what the base salary is. It is what production is required to earn it, and whether that production target is reasonable for your specialty.

Look for the wRVU threshold (sometimes called the target, floor, or minimum production requirement). Compare it against MGMA median benchmarks for your specialty. If your threshold sits above the 60th percentile, you are working harder than most peers in your specialty to earn what the contract advertises. If you are new to how wRVUs work, What is a wRVU? covers the fundamentals in plain language.

2. The $/wRVU rate and how to benchmark it

This is the number that determines your long-term earnings trajectory.

The $/wRVU rate is what you earn per unit of work above your threshold (in base + bonus models) or for every unit of work (in pure production models). It is sometimes shown as a single number. It is sometimes broken into tiers, with higher rates above certain production levels.

Find the rate. Compare against your specialty's median. A $7/wRVU spread between contracts — roughly the difference between the 35th and 65th percentile — translates to $35,000-$70,000 per year in compensation.

This is the single most important number in your contract that you have probably never been told to look at.

3. Call schedule language and whether it is compensated

Call is one of the most common places contracts hide unpaid work.

Look for language defining call frequency, distribution, and compensation. Vague phrases like "call shall be shared equally among the group" or "physician will participate in call as scheduled" are red flags — they create no upper bound and no separate pay.

What to look for instead: a defined maximum number of call shifts per month or quarter, separate per-shift compensation for any call beyond a baseline, and a clause specifying what happens if the group shrinks due to turnover.

For specialties with heavy call burden — ICU, ED, OB, hospitalist — uncompensated call can absorb $30,000-$80,000 of annual compensation that physicians never see, because they assumed it was included.

The three things that matter for quality of life

Financial structure is one axis. The contract's quality-of-life implications are another, and they often matter more over time.

1. Geographic non-compete scope

A non-compete restricts where you can work after leaving the position. Most physician non-competes are negotiable. Many start at scopes that would substantially restrict your future career options.

The two variables to evaluate: radius and duration. A 5-15 mile radius is reasonable. A 25-50 mile radius from any facility owned by a multi-site health system can effectively bar you from your entire metropolitan area. A 12-month duration is typical. Anything longer warrants negotiation.

Some states (California, North Dakota, Oklahoma) significantly limit physician non-competes. Know your state's rules before negotiating.

2. Who pays tail insurance

Tail insurance covers malpractice claims filed after you leave a position for incidents during your employment. Most physicians have claims-made malpractice policies, which require tail coverage when employment ends.

Tail policies cost roughly 150-200% of your annual malpractice premium — typically $30,000-$80,000, higher for surgical and procedural specialties.

Look for explicit language stating who pays for tail coverage and under what circumstances. The strongest position is employer-paid tail if you leave after a defined tenure (often 3-5 years) or if termination is without cause.

3. How productivity targets can be renegotiated over time

A wRVU threshold that locks in for the entire contract term becomes a trap as your practice grows. If you produce well above your threshold consistently, the contract should provide a mechanism for the rate or threshold to be adjusted.

Look for an annual review clause. Without one, your reward for outperformance is more work at the same rate.

What residents typically miss

Three patterns repeat across first contracts:

Accepting the first offer without checking benchmarks. Initial offers are typically 10-20% below what employers are willing to pay. The negotiation is expected. Most residents do not negotiate because nobody told them they could, or they are afraid the offer will be withdrawn. Offers are very rarely withdrawn over reasonable counter-proposals.

Not reading the call burden language carefully. The vague "as needed" or "as scheduled" phrasing is so standard it is easy to skim past. Skimming past it is how physicians end up taking 6-8 calls per month with no separate compensation.

Assuming wRVU targets are "standard." There is no standard. Targets vary widely between employers, even within the same specialty in the same metro area. The number in your contract was chosen by your employer to optimize their economics. It deserves the same skepticism as any other employer-chosen number.

The 10-item checklist

Before you sign anything:

1. Find the wRVU production threshold and compare it to your specialty's MGMA median
2. Find the $/wRVU rate and compare it to your specialty's median
3. Calculate what you actually earn at the median, 75th, and 90th percentile of production
4. Read every sentence containing the word "call" — note what is defined and what is not
5. Find the non-compete clause and check the radius, duration, and definition of "competing"
6. Find the tail insurance clause — who pays, under what conditions
7. Find any termination clause — what counts as cause, what notice is required
8. Find the wRVU threshold review clause — does it adjust over time, or is it locked
9. Note any exhibits or appendices that contain compensation details (often where the actual numbers live)
10. Identify three specific items you want changed before you sign

When to get an attorney vs when FairRVU is sufficient

For legal terms — non-competes, termination clauses, state-specific issues, anything ambiguous — engage a healthcare attorney. The fee is real but the leverage is high. An attorney can communicate directly with the employer's counsel to negotiate changes, which is often worth the entire fee.

For financial structure — wRVU targets, $/wRVU rates, call burden economics, 2026 benchmark alignment — FairRVU runs the analysis in 60 seconds. If the analysis surfaces structural issues, that becomes the basis for negotiation, sometimes without an attorney needing to be involved at all.

For most first attending contracts, the right sequence is: run the financial analysis first, then decide whether the legal terms warrant a full attorney review. This catches the issues most likely to cost you money while keeping spend proportionate to actual risk.

Before you sign

The contract on your desk represents three to five years of your professional life and somewhere between $1 million and $3 million in compensation. The 60 minutes you spend evaluating it is the highest-leverage time investment of your early career.

Most residents sign their first contract in less time than they spend choosing a car. The structure of the document — long, dense, technical — is partly responsible. So is the absence of training. Most of all, so is the assumption that the offer is what it appears to be on the first page.

It is not. The base salary is the headline. The wRVU mechanics, the call language, the tail responsibility — these are where the actual money lives.

Before you sign, run the financial analysis.