Casey Gocel, Esq., Co-Chair of the National Dental Law Group at Mandelbaum Barrett, was invited to speak on Dental Service Organizations at Greater New York Dental Meeting — the largest dental meeting in the United States. Together with panelists Benjamin Bush, Brian Houlahan, and Justin Schafer, the session explored what dental professionals need to know before making major decisions about DSO relationships.
Whether you are considering selling your practice to a DSO, exploring a partnership arrangement, or simply trying to stay competitive in a market shaped increasingly by group dentistry, having the right legal guidance before any decision matters. The National Dental Law Group at Mandelbaum Barrett has spent decades helping dental professionals navigate DSO transactions and protect their interests throughout the process.
What Is a DSO?
A Dental Service Organization, or DSO, is a company that provides non-clinical administrative, business, and management support to dental practices. DSOs handle the operational side of running a practice — billing, marketing, staffing, purchasing, and facilities management — while affiliated dentists retain clinical decision-making responsibility.
DSOs have grown significantly over the past two decades and now operate across all fifty states. For some dentists, selling to or partnering with a DSO offers an appealing path to liquidity, practice growth, or a structured transition toward retirement. For others, the right choice is staying independent or competing strategically against DSO-affiliated practices nearby.
Key Legal Considerations When Evaluating a DSO
Every DSO transaction is different, but certain legal and business considerations arise consistently. Addressing them before entering any negotiation puts you in a much stronger position.
- Valuation: DSOs typically calculate practice value based on EBITDA multiples. Knowing how this works helps ensure you receive fair consideration for the goodwill and patient relationships you’ve built
- Employment terms: DSO affiliations involve multi-year employment agreements. The terms governing compensation, clinical autonomy, and exit rights can vary widely and deserve careful review before signing
- Restrictive covenants: Non-compete and non-solicitation provisions are common in DSO agreements. Their enforceability depends on state law and the specific language used
- Roll-equity arrangements: Many DSOs offer equity in the parent entity as part of the deal. These arrangements come with their own risk profiles, vesting schedules, and liquidity limitations
- Due diligence: Just as the DSO evaluates your practice, you should evaluate the DSO — its financial stability, management track record, and its history with affiliated dentists
Competing with DSOs as an Independent Practice
Not every dentist wants to sell or affiliate. Many independent practitioners are finding ways to compete effectively by focusing on the clinical depth, patient relationships, and community connection that larger DSO networks can struggle to replicate at scale.
Effective strategies for independent practices include group purchasing arrangements to reduce supply costs, focused marketing investments in local reputation and patient experience, and operational improvements that allow smaller practices to run with greater efficiency. An attorney familiar with dental practice operations can help identify the structural changes that provide the greatest competitive advantage for your specific situation.
Talk to the National Dental Law Group at Mandelbaum Barrett
The National Dental Law Group at Mandelbaum Barrett has helped dental professionals across the country evaluate DSO transactions, negotiate favorable terms, and protect their interests throughout practice transitions. Casey Gocel and William Barrett are also the authors of “Pain Free Dental Deals” and “The DSO Decision: Winning Answers from Every Angle,” two resources widely used by dental professionals evaluating DSO relationships.
If you are considering a DSO transaction or looking for guidance on how to build and protect your dental practice, contact our team to schedule a consultation.
What is the difference between selling a dental practice to a DSO and partnering with one?
In a full sale, the dentist receives a lump sum and typically enters a multi-year employment agreement to continue practicing under the DSO. In a partnership or affiliation model, the dentist retains a meaningful equity stake while contributing their practice’s operational infrastructure. Each structure has different financial, tax, and clinical-autonomy implications. The right structure depends on your goals for liquidity, practice growth, and how long you plan to continue practicing.
Can a dentist leave a DSO after affiliating?
It depends on the terms of the affiliation agreement. Most DSO agreements include multi-year employment commitments and non-compete provisions that restrict where and how soon a dentist can practice independently after departure. The enforceability of these restrictions varies by state. An attorney should review the full agreement — including exit terms, buy-back provisions, and restrictive covenants — before you sign anything.
Are non-compete agreements in DSO contracts enforceable?
Enforceability depends on state law and the specific terms of the agreement, including the geographic scope, duration, and whether the restrictions are reasonable in light of what was exchanged. Some states are more favorable to employees, while others give more weight to the employer’s interest in protecting goodwill. A dental law attorney can evaluate the specific provisions in your agreement and advise on their likely enforceability in your state.
How is a dental practice typically valued in a DSO transaction?
DSOs generally value practices using a multiple of EBITDA — earnings before interest, taxes, depreciation, and amortization — which reflects the practice’s profitability rather than just its revenue. Multiples vary depending on the practice’s patient volume, payer mix, growth trajectory, location, and the competitive landscape. Having an independent valuation performed before entering negotiations gives you a stronger foundation for evaluating any offer you receive.