Remember the “before times” pre-pandemic, when most doctors had a single job that they went to every day, saw patients, did surgeries, took call for the same employer or practice?

Then in March 2020, the unthinkable happened. There was a worldwide shutdown of almost everything, including physicians’ offices, except for emergency rooms, ICUs, and other essential health care functions.

Once the realization set in that medicine was going to have to change drastically to accommodate non-emergent patient care, telehealth exploded. CMS and other payor waivers came into place, expanding telehealth to keep patients and their providers safe during care. We had expedited state licensing and credentialing to accommodate. Telehealth allowed many physicians to continue working from home.

However, with the option to work from home, no commute time, homeschooling, etc., many physicians decided to explore other activities, both clinical and non-clinical or side gigs. The number of telehealth platforms has mushroomed to provide part-time remote opportunities for behavioral health, women’s health, primary care, and other services. These companies were a boon to many physicians as volumes in traditional jobs were erratic and uncertain.

However, it was not just part-time and remote clinical opportunities that were proliferating. Just as many workers in the U.S. and worldwide were taking up other activities such as learning how to bake sourdough bread (my starter was named Wilma!), selling crafts online, writing books, or becoming social media influencers. Physicians were also exploring outside activities that had once been hobbies but now showed potential to generate real income.

During the early months of the pandemic, several physicians reached out to me to inquire about the legal structure of these side gigs. I have limited my clients to physicians and their business issues, so this was an area of the law that I could get on board with very quickly.

As I always remind my clients, their biggest asset is their license to practice medicine. If that is ever restricted or taken away, it is tough to get back to a place where that asset is once again fully usable. The first thing that I would always remind my clients was that if they were contracted to an employer in a W-2 situation, then they would need to go back to the contract and ascertain whether or not the outside clinical or health care-related activities they were contemplating were even permissible by their current employer/company and signed contract.

Most physician employment contracts have a clause that prohibits any outside health care-related activities, unless the employer approves in writing and in advance. There are many nuances to this process, such as advanced written disclosure, determining whether additional and separate malpractice insurance is needed, can the physician keep all compensation, and whether there were certain activities that were completely verboten. Many employers will not permit you to moonlight, consult with their competitors, or work with pharma. They may also object to receiving payment for expert witness testimony against the employer/company and its employees/affiliates.

Over the past several decades, physicians have had passive investments in real estate, have done consulting opportunities, moonlighting/locums expert witness testimony, etc., and all of those activities are considered side gigs. But the pandemic and the time at home allowed many people to think about how they could diversify their income stream, indulge a passion project, or start that dream business.

Why are physicians pursuing side gigs? Some are driven by factors such as rising student loan debt, the increasing cost of living, and a desire for a better work-life balance. In contrast, others are motivated by professional growth, skill diversification, flexibility, and autonomy. Side gigs can diversify income sources and provide financial resilience, and reduce dependence on a single employer. Side gigs can offer intellectually stimulating activities outside routine clinical work. Plus, the rise of the “FIRE” movement (Financially Independent Retire Early) has enabled more physicians to pursue higher incomes, invest, and save while living more frugally, aiming to create a “nest egg” by 45, allowing for early retirement.

Here are my suggestions for keeping your side gig legal:

• Does your employment contract allow it, and if they do, can you keep any derived income?
• Do you need additional malpractice insurance?
• What legal entity are you going to use to protect this new side gig? Is an LLC, S Corp, or other legal entity best?
• Get an accountant to determine your tax consequences and guide you on expenses/deductions. It is essential to understand how and when to pay all required taxes in withholdings. Your accountant may also guide you in setting up retirement accounts, such as a SEP IRA, solo 401(k), HSA, and other retirement vehicles. When negotiating compensation for 1099 projects, ensure you consider all relevant expenses.
• Are there any intellectual property assets, such as a trademark, a patent, or other creative assets that need to be protected?
• If your side gig involves social media, check again with the contract about the non-disparagement and confidentiality clauses that could apply.
• If you are creating content while working for an employer, do they have any licenses to your intellectual property?

Most employers want to ensure the following:

• Their work is your focus, and it is done with 100 percent of your effort and energy (not while you are tired from an overnight shift).
• You are not using their resources for this outside work.
• You are covered for separate malpractice insurance if needed.
• There are no conflicts of interest.
• You are doing them in your spare time.
• Whatever you are engaging in is not going to disparage them in any way.

I have a lot of stories as well about physicians doing $200,000+ for pharma companies a year in income, others expanding their knowledge and skillsets (as mentioned), and others diversifying their skillset and actually leaving medicine with the newly found skillset (going to pharma, etc).

I have also seen some employers that will, in the contract, say they are taking a percent of anything approved, as a disincentive to do business with them. I have seen 20 percent taken by the employer, up to 80 percent. So, if you give a talk for pharma in your spare time and make $2,000 honoraria, they will take $1,600 of it.

Other companies want it run through payroll (so the outside firm pays their company, then they cut the check to the employee). I really do not get this one unless it pads revenue for the organization, making them look more valuable.

So if you want to add to your income, start a passion project, monetize your hobby, etc, make sure that you follow the guidelines above to keep these outside activities legal, and contractually permissible. Do not let your “side gig” derail your “main gig”! Before starting any side business, have your employment contract professionally reviewed to identify potential conflicts and protect both income streams.

Anu Murthy is a licensed attorney at Contract Diagnostics, specializing in health care transactions, intellectual property, and health care startups. With a focus on licensed providers at all stages of the professional continuum,  she helps negotiate strategic deals, terms, and partnerships. Anu blends legal rigor with business insight to mitigate risk in complex negotiations and drive favorable outcomes. She is known for clear communication, meticulous attention to detail, and a collaborative approach that aligns legal strategy with operational goals. Anu earned her JD from Boston University School of Law.

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