Key Takeaways
- A dental practice broker values the practice, sources buyers, creates competitive tension, and negotiates business terms. A dental attorney drafts and reviews legal documents and protects the owner’s legal position.
- Hiring professionals in the wrong order can cost a selling dentist six figures or more. The broker typically comes first to establish valuation and go to market, and the attorney joins once a letter of intent is in hand.
- Broker commissions typically range from 8%–12% of the sale price and are contingent on closing. Attorney fees are hourly or flat and can vary significantly with transaction complexity.
- Leaving out either the broker or the attorney can expose restrictive covenants, lease assignment, patient-record transfer, and purchase-price allocation. These areas directly affect the seller’s net proceeds and post-closing obligations.
- McLerran & Associates is a dental-specific sell-side advisor that runs the deal from valuation through closing so the attorney can focus entirely on legal protection.
Talk with a dental-specific sell-side advisor about your transition.
The Problem: Most Owners Hire The Right Professionals In The Wrong Order
A practice owner usually sells once in a career. Most owners call a broker and treat the attorney as optional, or call an attorney and expect them to run the market process. Either path puts the deal and the legal position at risk. The sequencing error can be more costly than most owners realize. The broker’s valuation and buyer outreach define the deal the attorney will document. When the attorney arrives before a letter of intent exists, they edit terms instead of negotiating them. When the attorney never arrives, the owner signs a purchase agreement without independent legal review of restrictive covenants, lease assignment, patient-record transfer obligations, and purchase-price allocation. Together, these terms determine what the owner actually keeps.
McLerran & Associates is a dental-specific sell-side advisor and advocate, representing the selling dentist and not the buyer. The firm runs the deal from valuation through closing so the attorney can focus entirely on legal protection. As the nation’s largest dental-specific sell-side M&A advisory and brokerage firm, McLerran works both the private-buyer (doctor-to-doctor) and DSO/private-equity paths in roughly equal measure. The team has participated in approximately 2,000 successful practice sales, about $2 billion in closed transaction volume, more than 10,000 practices evaluated, and over 100 years of collective dental-industry experience.
Dental Practice Broker Vs Attorney: What Each One Owns
The table below compares each professional across key parts of a sale so you can see where one role ends and the other begins.
| Dimension | Dental Practice Broker / Sell-Side Advisor | Dental Attorney |
|---|---|---|
| Main Job | Value the practice, source buyers, create competition, negotiate business terms | Draft and review legal documents, protect the owner’s legal position, manage regulatory risk |
| Valuation | Produces the practice valuation and EBITDA (earnings before interest, taxes, depreciation, and amortization, a measure of true operating profit) analysis used to go to market | Does not produce the practice valuation. May review valuation-related representations in the purchase agreement. |
| Buyer Sourcing | Identifies, qualifies, and approaches buyers. Manages the competitive bid process. | Does not source or market to buyers. |
| Negotiation | Negotiates price, deal structure, letter of intent (LOI) terms, and earnout provisions on the owner’s behalf | Negotiates legal terms in the purchase agreement, representations, warranties, and indemnification provisions |
| Contract Drafting | Does not draft legal documents. Drafting legal instruments by a non-attorney can constitute the unauthorized practice of law under state bar rules and state statutes. | Drafts and reviews the asset purchase agreement, bill of sale, lease assignment, restrictive covenants, and transition services agreement |
| Due Diligence | Organizes diligence requests, defends the EBITDA analysis under buyer scrutiny, keeps the deal moving | Converts diligence findings into representations, warranties, covenants, indemnities, and closing conditions |
| Regulatory | Familiar with dental-industry norms. Does not provide legal advice on licensing, corporate practice of dentistry rules, or HIPAA compliance. | Advises on state dental board requirements, professional corporation structure, HIPAA patient-record transfer obligations, and payer-contract assignment |
| Cost Model | Commission contingent on closing, commonly in the range of approximately 8%–12% of the sale price for dental practice transactions | Hourly or flat fee, typically ranging from several thousand dollars to significantly more depending on transaction complexity and market |
The boundary between these roles matters because neither professional can fully substitute for the other. The California Dental Association advises that the first step in selling a dental practice is to assemble a transition support team consisting of a practice broker, a dental CPA, and an attorney. Many steps occur before, during, and after the sale, and this team helps support legal compliance and a smooth transition. The Florida Dental Association similarly distinguishes the attorney’s role of reviewing and negotiating the purchase agreement, lease agreements, and employment contracts from the transition professional’s role of navigating the logistics of ownership transfer, patient retention, and staff integration.
McLerran & Associates makes introductions to attorneys, lenders, and other specialists while staying firmly in its own lane. The firm’s sell-side-only structure keeps its incentives aligned with the owner because it does not represent buyers.
See how a broker and an attorney work together in a dental sale.
Discuss your transition plan with a McLerran advisor.
Who You Should Hire First When Selling A Dental Practice
Most sellers benefit from engaging the dental practice broker first to establish valuation and go to market, then bringing in the dental attorney once a letter of intent is in hand. The attorney can still weigh in earlier on entity structure, employment agreements, and lease matters that may affect the deal before a buyer is identified.
This sequence follows directly from the role boundary. The broker’s valuation and buyer outreach define the deal the attorney will document. A well-run broker process that creates competitive tension among multiple qualified buyers produces an LOI with price and structure already negotiated. The attorney then reviews and strengthens that LOI, drafts the definitive purchase agreement, and protects the owner’s legal position through closing. When the order reverses, the attorney works without a market-tested price or a competitive process behind it.
On the buy side, the sequence flips. Buyers usually engage their attorney and CPA before approaching a broker or seller, because the buyer needs independent legal and financial review before committing to any terms. Dentagraphics’ buyer guide advises that a dental attorney and accountant should review the transaction rather than relying solely on the broker or seller.
McLerran & Associates structures every engagement around a four-part journey: Understand Your Options, Create Competition, Find The Right Fit, and Maximize Your Outcome. The broker leads that journey. The attorney protects the owner’s position within it.
Dental Practice Broker Commission Vs Attorney Fees: How The Costs Stack
Once you know which professional owns which part of the deal, the next step is understanding what each one costs and how the two fee structures interact. Owners who understand where they might pay twice for overlapping work can budget a transition more accurately.
A dental practice broker is typically paid a commission contingent on closing. Most dental practice brokers charge a commission at closing of approximately 8% to 12% of the sale price, and the commission is paid entirely by the seller and is separate from legal fees, accounting fees, and specialized tax advisory fees. For larger group or DSO-level transactions, some firms use tiered structures that reduce the marginal percentage on higher transaction values, and healthcare M&A boutiques handling DSO and private-equity-level transactions may charge a monthly retainer plus a success fee at close, with retainer fees often credited against the success fee.
A dental attorney is typically paid hourly or on a flat fee. Attorney fees for a dental practice sale can vary by transaction complexity, and dental-focused M&A attorney fees can range considerably depending on practice size and deal complexity. Owners can reduce surprises by confirming scope and fee structure in writing before engaging any attorney.
Owners often pay twice when the roles overlap. Paying an attorney to run buyer outreach uses a high-cost resource for a function attorneys usually do not perform efficiently. Paying a broker to draft legal documents can cross into the unauthorized practice of law. A clean division of labor helps avoid this problem. The broker runs the market process and negotiates business terms. The attorney reviews and documents the legal terms. A detailed breakdown of how dental practice broker commission rates are structured can help owners budget the broker side of the equation before engaging.
Can A Lawyer Act As A Broker In A Dental Practice Sale?
An attorney can perform brokerage-adjacent tasks such as drafting and negotiating legal documents, but brokerage itself is a distinct function. Valuation, marketing, and buyer sourcing require different tools and relationships that most attorneys do not maintain. A dental-specific broker carries active buyer relationships, runs a structured competitive process, and produces a diligence-grade EBITDA analysis. Most attorneys do not build those capabilities into their practices.
Dental contract attorneys themselves distinguish the two roles. The broker manages market positioning, buyer outreach, negotiations, and transaction process. The attorney protects the client’s legal and contractual position. State rules governing what a licensed attorney may do within a given engagement, and the attorney’s own scope of representation, define what services they may provide in any specific transaction. In practice, the broker’s role centers on locating buyers or sellers and managing the transaction process rather than providing legal advice. Owners should consult their own advisors rather than relying on any general statement about what a lawyer may or may not do in their jurisdiction.
What Goes Wrong When You Skip The Broker Or The Attorney
Specific contractual failure points, not generic warnings, usually determine where real money is lost. Four areas account for many post-LOI disputes and deal re-trades:
- Restrictive covenants and non-compete terms. Non-compete geographic scope is typically 5–15 miles and duration typically 2–5 years, though buyers routinely push for broader terms. An overly broad non-compete can restrict a seller’s future professional life. An unenforceable one leaves the buyer’s goodwill investment unprotected. Restrictive covenants and indemnification obligations determine the seller’s post-closing freedom and exposure to future claims, so these terms call for attorney review.
- Lease assignment and landlord consent. If a landlord refuses to assign an existing lease and demands a new lease at current market rates, frequently 20–40% higher than a 10-year-old lease, the economics of the deal change materially. Securing landlord consent early helps prevent the office lease from killing the deal late in the process and can protect the seller from ongoing personal liability after exit.
- Patient-record transfer and HIPAA considerations. Custody of patient records deserves particular care in a practice transaction. HIPAA governs the transfer of patient records. The purchase agreement should address who is responsible for maintaining legacy records for the statutory retention period and how ePHI (electronic protected health information) liability shifts at closing.
- Purchase-price allocation and its tax treatment. Under IRC Section 1060, both buyers and sellers must report a purchase price allocation on IRS Form 8594, and the allocation between goodwill, typically taxed at long-term capital gains rates, and other asset classes, which may generate ordinary income, can shift the seller’s net proceeds materially. Legal counsel should ensure the purchase agreement accurately identifies transferred assets, liabilities, restrictive covenants, and allocation terms, while the CPA or tax attorney determines tax treatment and prepares Form 8594.
Leaving these terms without dental-specific legal review can expose the seller to avoidable risk. Entering the process without a broker leaves valuation and buyer competition in the buyer’s hands, which benefits the party most motivated to keep the price low. That gap shows up in close rates. Do-it-yourself close rates can run as low as 15%–20%, versus roughly 80% for a well-run brokered process. McLerran & Associates clients transact at roughly 85%–90%, compared to an industry norm closer to 35%–40%. The cost of selling without a broker often extends well beyond the commission saved.
Explore how a broker and attorney could support your specific sale.
Where The CPA Fits In A Dental Practice Sale
The CPA supports valuation, EBITDA normalization, and tax planning throughout the process. EBITDA normalization means adjusting reported income to reflect true operating profitability by adding back personal and non-recurring expenses. McLerran & Associates builds a CPA-led EBITDA analysis as the foundation of every engagement. This diligence-grade work happens before the practice goes to market so the number holds under buyer scrutiny and the deal is less likely to be re-traded during due diligence.
The CPA also advises on purchase-price allocation strategy and the tax treatment of different deal structures. They work alongside the attorney to help ensure the agreed allocation is documented correctly and filed consistently by both parties on Form 8594.
Buyer-Side Vs Seller-Side: How The Sequence Flips
On the sell side, the dental practice broker leads and the attorney protects. The broker establishes value, runs the competitive process, and negotiates business terms. The attorney reviews and documents the legal terms and protects the owner’s position through closing.
On the buy side, the attorney and CPA usually come first. A buyer representative engaged after the asset purchase agreement is drafted is described as “editing, not negotiating,” because transition period, non-compete radius, accounts receivable treatment, and staff retention terms are mostly settled by that stage. Many buyers instead build an advisory team of a CPA, an attorney, and a dental-specific lender. A broker is often unnecessary for buyers.
Frequently Asked Questions (FAQ)
How Much Do Dental Practice Brokers Charge?
Dental practice brokers are typically paid a commission contingent on closing, commonly in the range of approximately 8% to 12% of the sale price for dental practice transactions. The commission is paid by the seller and is separate from attorney fees, CPA fees, and any other advisory costs. Attorney fees are typically charged hourly or on a flat fee and vary by market and transaction complexity. Owners can confirm scope and fee structure in writing before engaging any professional. For larger DSO or private-equity-level transactions, some advisory firms use tiered commission structures or a retainer-plus-success-fee model, with retainers often credited against the success fee at closing.
Can My Attorney Handle The Whole Sale Without A Broker?
An attorney can draft and negotiate legal documents, but valuation, marketing, and buyer sourcing form a distinct function that most attorneys do not perform. Running a competitive market process, including identifying and qualifying buyers, creating competitive tension, and negotiating business terms, requires active buyer relationships and deal-process infrastructure that most dental attorneys do not maintain. Skipping the broker means the owner enters negotiations without an independent valuation, without a competitive bid process, and without a professional advocate whose primary job is to maximize the owner’s outcome. The result is typically a lower price and weaker terms, along with advisory costs that may not be meaningfully lower.
How Long Does A Dental Practice Sale Take?
The timeline can vary considerably depending on practice size, deal type, buyer financing, and how early the owner engages professional advisors. Doctor-to-doctor transactions with a pre-qualified buyer can sometimes close within several months of a signed LOI. DSO and private-equity-level transactions typically take longer from advisor engagement to funded close. Sequencing affects the timeline. Owners who engage a broker before going to market, and who involve an attorney early for entity and lease matters, often move through the process more efficiently than those who engage professionals reactively. Planning 12 to 24 months before a target exit date is generally advisable.
Do I Need A Broker If I Already Have A Buyer?
Having a buyer in mind does not remove the need for a broker’s core functions. An independent, diligence-grade valuation still helps establish whether the buyer’s offer reflects fair market value. The buyer has every incentive to set that number as low as possible. Without a competitive process, there is no market tension to push the price up or improve terms. A broker can also confirm whether the identified buyer is well-qualified and whether better-suited buyers exist in the market. Owners who skip the broker in this scenario often accept offers that are materially below what a competitive process could have produced.
What Does A Dental Attorney Actually Review?
A dental attorney reviews and negotiates the asset purchase agreement, which is the binding document that defines the assets sold, representations, warranties, and closing conditions. They also review the lease assignment and any required landlord consent, restrictive covenants including non-compete and non-solicitation provisions, purchase-price allocation terms and their tax implications, patient-record transfer and HIPAA compliance obligations, entity structure and state dental board licensing requirements, indemnification caps and survival periods, and any post-closing employment or transition services agreement. A dental-specific attorney, rather than a general business attorney, is advisable because specialty-specific complexity around state board licensing, professional corporation structure, insurance credentialing, and healthcare regulatory compliance is often missed by generalists.
How Do I Keep The Sale Confidential?
Confidentiality in a dental practice sale is usually managed through non-disclosure agreements (NDAs) signed by prospective buyers before they receive any practice information. It also involves controlled information release, sharing financial details only with qualified, vetted buyers, and scheduling buyer discussions and showings outside of clinical hours. A dental practice broker manages this process as a standard part of the engagement so staff, patients, and competitors do not learn of the sale prematurely. The purchase agreement should also address how and when patients are notified of the ownership change, which is a separate legal and regulatory obligation that the attorney handles.
What Is The Difference Between A Broker And A Sell-Side Advisor?
A traditional dental practice broker primarily lists practices for sale and matches sellers with buyers, often focusing on doctor-to-doctor transactions. A sell-side advisor, the role McLerran & Associates occupies, provides a broader scope of representation. This scope can include a CPA-led EBITDA analysis, financial forecasting across multiple deal structures, a structured competitive bid process among vetted buyers on both the private-buyer and DSO/private-equity paths, negotiation of the full letter of intent, quality-of-earnings defense through due diligence, and advocacy through closing. The distinction matters most for owners of larger or more complex practices where DSO or private-equity buyers are in the picture, because those transactions often require deeper financial analysis, broader buyer-pool access, and more intensive deal-process management than a traditional listing broker provides.
The Right Professionals In The Right Order
Hiring the right professionals in the wrong order puts the deal and the legal position at risk. The broker’s valuation and competitive process define the deal. The attorney’s review and documentation protect the owner within it. Most owners of premier dental practices need both, engaged in the right sequence, with a CPA supporting the financial foundation throughout.
McLerran & Associates is the dental-specific sell-side advisor and advocate that runs the deal with incentives aligned to the selling owner. With approximately 2,000 successful practice sales, about $2 billion in closed transaction volume, and a transaction rate of roughly 85%–90% against an industry norm closer to 35%–40%, the firm’s track record illustrates what a well-run, dental-specific process can help produce.
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