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Licensed attorney Anu Murthy discusses her article, “A lawyer’s guide to physician side gigs.” Anu details why the pandemic caused an explosion in physician side gigs (from telehealth to passion projects) and why many doctors are seeking new income streams, driven by everything from burnout to the FIRE movement. She reveals the number one risk to a doctor’s medical license: their primary employment contract. Anu explains the complex legal hurdles doctors must navigate, including contract prohibitions, conflicts of interest (like pharma consulting or expert witness work), the need for separate malpractice insurance, and intellectual property considerations. Discover the essential legal steps to protect your license before starting a side gig, and learn the shocking ways employers can claw back your extra income.

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Transcript

Kevin Pho: Hi, and welcome to the show. Subscribe at KevinMD.com/podcast. Today, we welcome Anu Murthy. She is an attorney, and today’s KevinMD article is “A lawyer’s guide to physician side gigs.” Anu, welcome to the show.

Anu Murthy: Thank you, Kevin. I appreciate being on here.

Kevin Pho: All right. Let’s start by briefly sharing your story, then we will jump right into your KevinMD article.

Anu Murthy: OK. I am the black sheep of my family. My brothers are both doctors, and I went to law school instead, much to the dismay of my parents. But as I said, I come from a physician family, and this is all I have done my entire professional career: work with physicians on their contract issues, their business issues, etc.

I did spend some time in-house at hospital systems for about a dozen years, and I really learned more about the employer side so that I can bring that experience also to my clients. I was a lobbyist working in D.C. for about a year on payment reform, specifically value-based payment reform.

Kevin Pho: Excellent. Your KevinMD article is very relevant because a lot of doctors are exploring nonclinical opportunities or other clinical opportunities outside their regular jobs. So I think this is very relevant. Your KevinMD article is “A lawyer’s guide to physician side gigs.” Tell us what it is about for those who didn’t get a chance to read it.

Anu Murthy: Sure. This was motivated by my experience during the pandemic. I had always worked with physicians on their employment contracts and partnership agreements. But then during the pandemic, when some physicians were laid off or their compensation was cut while they were at home or telecommuting, I just had some physician clients reach out to me and say: “Hey, I am thinking about doing this side gig in order for me to bring in some extra income. I have some time.”

They ranged from anything from writing a book, starting a coaching business, to try inventing and trying to patent an invention. I had several clients who started staffing companies during the pandemic, and a number of physicians decided to coach. Those were the things that were happening during the pandemic, and I realized that they needed legal help. It wasn’t just a matter of starting a business. They needed to know first and foremost if they were in an employment situation, whether or not their current employment situation, a 1099 or a W-2, would even allow them to pursue this side gig. Even if they were laid off or otherwise not fully employed at the time, they still had to follow the requirements of any contractual agreements that they had.

The other thing I was really worried about was folks doing side gigs or pursuing these passion projects that may not be legally protected, which would expose them to liability. So I wanted to talk to my clients about setting up the correct legal structure, setting up the correct taxation, paying taxes, etc. That was really important. So I always encouraged them to talk to a couple of people aside from me, such as a financial advisor or a CPA, just to make sure that they were setting things up correctly.

A lot of physicians saw this as a way of not just increasing income, but bringing some balance to their lives to do something that was not only enjoyable but creative as well, and it belonged to them. That is how I got involved in the physician side gig business. I will tell you, many years ago we tried a side gig in investing in real estate, and that just went so poorly that I haven’t tried a side gig in the interim. But there are just so many more opportunities now for physicians. It is not just sort of traditional locums, etc. It is a lot of nonclinical things in consulting for industry, pharma, etc.

Kevin Pho: And that last point really resonates. One of the themes of my site in the podcast is that physicians are more than our degrees, right? I talked to so many physicians, like you said, who do physician coaching. Obviously, I see patients, but I also have this podcast, so I have my own side gig as well. There are some legal hurdles sometimes that physicians have to overcome in order to pursue their side gigs. Let’s talk about the first point that you mentioned about whether their initial contract, whether it’s a W-2 or 1099, even allows physicians to have side gigs. Typically, when physicians signed their contract (it could be an academic medical center practice or health care institutions), what do you typically see regarding the legal language allowing or not allowing physicians to pursue activities outside that employment contract?

Anu Murthy: That is a great question. In almost every contract I review, there is a stipulation that says the physician or the employee is being engaged to work full-time and exclusively for the employer. That word exclusively is very important because employers, when they are hiring you, want to make sure that they are getting your full attention as it were during working hours. Of course, there are things that you can do outside of providing medical services or clinical services that they may not worry so much about.

Some of the things that they are concerned about is that they may not want you to work for the competition. They may not want you to work in certain industries such as pharma and device sometimes. Hospital systems especially seem to have some restrictions on that. They also want to make sure you are not engaging in an activity that could bring disparagement to them. They want to make sure you are working for a reputable company and that you are not using any other resources that the employer is providing, including their office space, computers, other support staff, etc. You should not be doing that.

I think one of the most important things that an employer looks at is whether you will have separate liability insurance to engage in those outside activities. So the key is disclosure, being transparent, getting advanced written permission from the employer, providing all the information that they may need, and then engaging in any outside activities. Again, these are typically for something that is related to health care. If you want to give guitar lessons or if you want to Airbnb, that is different. You probably don’t need advanced written permission from your employer.

Kevin Pho: Hypothetically, let’s say physician coaching. I have a lot of physicians who want to cut back on their clinical time and become a physician coach. So they approach their employer and they are transparent in terms of what they want to do. In general, how reasonable are employers in allowing their physicians to pursue health-related side gigs?

Anu Murthy: I find that they are pretty reasonable, and they are not going to withhold consent as long as it is not for the competition. Sometimes, expert witness testimony, for example, they may not give you consent to do that if you are going to be getting paid to provide testimony against someone in the system that you are working for. Now, of course, if you get subpoenaed or compelled to testify, that is different. But in general, most employers are cognizant of physicians’ needs and desires to do something outside of clinical work.

It is generational too. Almost every physician I speak to these days, even if they don’t have something right now, says: “Yeah, but in the future, I may want to consult or I may want to write a book or may want to do something else.” So, I think employers are definitely looking at that. I had a recent client who was not allowed to work for an immediate competitor doing some consulting for them, and so that is understandable.

Kevin Pho: How about an initial contract negotiation? Even before or during that initial negotiation process, when a physician is thinking about joining a group, should side gigs be mentioned? Should it be initially part of the contract that a physician can pursue something outside of clinical duties? When should that be approached?

Anu Murthy: I strongly believe that it should be approached even during the interview process. There are so many opportunities that come up right now in terms of consulting, telehealth work, etc. I think never say never. Even if you as a physician think you only want to work this job, you never know when an opportunity comes up to do something outside of your nine-to-five full-time work. So, talk about it and find out what the process is. They are not likely to just say: “We are going to give you a wholesale approval to do anything that you want.” So if you have something in mind, definitely talk to them about it and see what the process is. Start early on.

Kevin Pho: Now have you heard any particular horror stories where a physician side gig was in direct conflict of their employment agreement? Tell us about some of the potential repercussions of that.

Anu Murthy: Sure. I don’t know if I have horror stories, but I definitely have some clients who have faced issues. For example, I have a client who has written a book, and she does book tours and speaking engagements. Unfortunately, her employer gives her a hard time every time she wants to do something like that, even though it is written into her contract that she is allowed to do so. They are just hypervigilant about the audience that she speaks to. So they always want to make sure who is in attendance. Is it pharma? Is it industry? Is it competitive in nature?

I also have had some unfortunate circumstances where I have had clients who have invented something or created something, such as intellectual property, and the employer tries to come and get a piece of the action when the physician has been trying to monetize that. Those are things to look out for. Intellectual property is a big issue. If you are going to start any kind of business and there is a possibility that you are going to monetize it and scale it and perhaps look to sell that business, you really want to make sure that you are protecting your intellectual property, and that includes getting a trademark or copyright protection.

I had another recent client who was trying to sell their business. They have scaled it, but they don’t own their trademark. The investors who were looking to buy the business said: “Look, we don’t want to be sued for trademark infringements. So you really need to take care of getting that trademark before you sell to us.”

Kevin Pho: In general, how reasonable are most health care employers when it comes to things like intellectual property? If a physician makes a lot of money from the side gigs, do they have a case where they are entitled to some of those profits and revenues?

Anu Murthy: Well, yes and no. That is why I think that it is really important to look at the contract. Always treat your contract as the foundation of your relationship. If you are working with a contracts attorney and you have some intellectual property that you are either developing or going to develop (even a kernel of an idea that you want to develop), get the protection early on.

Nowadays, it even extends to physicians who have social media. A lot of dermatologists, for example, have social media accounts. For those clients, I highly recommend disclosing all your handles and all the accounts that you have, and making sure that the employer or future employer is signing off on your ability to retain all the content that you create under those handles and accounts. Otherwise, if you start getting into lucrative collaboration agreements, brand sponsorship, etc., your employer may be able to receive part of that money. Always look at the foundation of the contract and think about all the hypotheticals that could happen in your career. Try to address them early on instead of trying to go back later and get into some kind of dispute with the employer.

Kevin Pho: Now let’s talk about the second issue that you mentioned, and that’s of malpractice. Let’s say in this scenario, like we talk about a physician is an influencer, has a social media side gig, or writes a book or coaches. Tell us the type of malpractice insurance is typically required for these health-adjacent activities.

Anu Murthy: OK. If it is clinical-based activities, of course, you need to make sure you have separate malpractice insurance. For some of the health care-adjacent types of things, there are coaches’ insurance products available. It is always a good idea to speak to an insurance broker to make sure that whatever you are engaging in outside of your primary employment is covered. Check to see if you need anything else. Obviously, if you are doing something like starting a restaurant, there are all kinds of licenses and insurances that you need for that. But in general, you don’t need liability insurance unless you are providing clinical services.

Kevin Pho: Has there been cases where a physician has been sued for malpractice because of their side gig, as far as you know?

Anu Murthy: As far as I know, I don’t. I am not a litigator, so I personally have not had any of my clients who have come to me and said: “Hey, I am being sued because of this.” If that happened, unfortunately, I would have to refer them out to a litigation specialist.

Kevin Pho: But in general, an employer’s malpractice insurance generally doesn’t cover health-adjacent activities outside that clinical spectrum. Is that fair to say?

Anu Murthy: Absolutely. Absolutely.

Kevin Pho: We are talking to Anu Murthy. She is an attorney, and today’s KevinMD article is “A lawyer’s guide to physician side gigs.” Anu, let’s end with some take-home messages that you want to leave with the KevinMD audience.

Anu Murthy: OK. If you are thinking about a side gig, look to your contract. Have an attorney take a look at it. Make sure that you are complying with all the requirements of disclosure and getting advanced permission. That is really important. Talk also to an attorney about the legal entity that you want to have for your side gig. Talk to a CPA about paying taxes. You don’t want to be caught unawares regarding paying the required quarterly taxes, etc. If you have intellectual property, protect it. It just costs a few thousand dollars to protect a trademark. If you monetize this and scale it, and you are thinking about selling your side gig (your business that you created), you have to own the intellectual property.

Kevin Pho: Anu, thank you so much for sharing your perspective and insight, and thanks again for coming on the show.

Anu Murthy: You’re welcome. Thank you.