Trends in the DSO & Private Practice Sale Markets—featuring David Cohen

Welcome back, everybody, to another episode of the Dental Boardroom podcast. I'm your host, Drew Phillips, and I have an esteemed and well respected guest, Mr. David Cohen. He is an attorney in the dental space. His firm navigates clients through between 300 and 400 transactions annually. And he is coming equipped with a ton of experience and insight to share with our listeners today. And I am very excited to welcome David Cohen. So welcome, David.

Thanks so much for having me. I'm really looking forward to this and I know it's been a long time awaiting.

Likewise, very, very much looking forward to today's episode. So, David, let's get started with a little bit of a background on yourself and how you got into dental and kind of where you. How you got to where you are today.

Sure. So dental was organic for me. I grew up in a dental family. My father is a periodontist and I grew up in the Seattle area. So I grew up around the realm of dentistry. And my father actually was heavily into continuing education and started a network called Seattle Study Club, which many are familiar with. And so just in growing up and going to dental conferences and just being around colleagues of his, I was always around dentists or specialists. And so I always knew that I'd get back connected in some capacity. Went through college and, you know, sort of wanted to pave my own path and not necessarily be a dentist myself. Played basketball all through college and at some point realized I wasn't going to the NBA and had to do something else. So I went to law school and then worked in the transactional investment realm on the legal side for, for a bit and then just had a good opportunity to go back into dentistry and start my own firm that would be assisting dentists with their business transactions and most particularly their dental transitions. It seemed like there was a big demand for that. And so I took it full steam ahead about 15 years ago and haven't looked back since and have really enjoyed it. And as you referenced in your opener, we do between three to 400 practice transitions nationwide, and that's either drafting or reviewing the documents to effectuate a sale transaction for practice. But we also do handle employment agreements and we also do business structuring and we do a ton of real estate, because real estate purchase and or lease is always involved in any of these deals. So that's kind of how we got into the world of dentistry and it was at an early age.

That's a really cool story. So you have a very unique perspective growing up, you know, having a family around dentistry and Then navigated your way back. I love that story. David, maybe you could give us what you're seeing just in general in the market today as it relates to the legal side, both in private practice transactions and your more corporate DSO offerings.

Yeah. So the market, I feel like just to kind of build a foundation for. To answer your question directly about what we're seeing today, foundationally, the dental industry has been extraordinarily strong and consistent. And you know, in our firm, we had continuously seen an uptick, you know, ever since we started. And then when Covid hit, there was a very short period obviously where practices were closed and there wasn't nearly as much business being conducted. And then after Covid, I think everybody in the industry experienced this. On the transactional side, there was just a massive boom and a huge sense of urgency from those to make deals. And I think that that was a product of, on the DSO side, money being inexpensive and private equity wanting to take full advantage and optimize the opportunity at hand, which probably only comes across once in a lifetime, I would say.

Probably.

And then you also had on the private deal just a lot of movement. And I think you found a lot of doctors who were maybe going to retire in a few years, decide to pull the plug early just because they didn't want to comply with all the things that Covid came with and all the maintenance of the office and the new standards and the new protocols for offices. And you also saw younger doctors who decided that they really enjoyed their quality of life and their balance when they were able to recalibrate and be home for a little bit during COVID and they found maybe that a different path was best for them. And so there was just a ton of movement and there was a ton of practice by buying and selling really at insane levels. I mean, every firm that we were on deals with was also just absolutely slammed. I was working 17 hours a day. I mean, it was really just insane. And then you thought that that would be it. But then, you know, I would say that was like 2021. And then you thought that there'd be a Correction. And then 2022 was bonkers again. And I think it really corrected itself, I would say, in 2023. And I would say that the private doctor to doctor deals became, you know, actually they still stayed pretty consistent. I think it's. Even though that money's more expensive. I think those that are buying private practices have more of a long term vision. And they know that over the span of ownership they're going to, you know, the benefits are going to outweigh the burdens, even with maybe a higher interest rate now that they can refinance later. And so they weren't. It doesn't seem like the private doctor was letting the economic environment get in the way, whereas the DSO side slowed down pretty dramatically. And I think that's because money was more expensive and with a goal to recapitalize and flip, you know, there's definitely a shorter hold. And with a shorter hold, expensive money becomes less, you know, less doable, and you just can't underwrite your deal in the same way. And so we definitely saw a pullback. Many DSOs completely stopping. We also saw other DSOs that were rocking and rolling, but as a whole, the DSO industry kind of slowed down some. And so now we, we get to 2024. And now I'm about to directly answer your question. And I would say that, you know, I can't speak for the entire industry. I can only speak for those in my circle that, that we, you know, communicate with. And also from my own firm, I would say that the similar held true in the first quarter of 2024, where we were still extraordinarily busy, you know, a ton of private deals, but the DSO stuff just really was still very slow. And then I would say that as Of April of 2024, things have picked up a bunch. And I'm wondering, and I mean on the DSO side, and I'm wondering if that's a sign of things changing in the environment or if it's just a small sort of blip on the radar and more of a coincidence than anything. And so it remains to be seen, and it'll be definitely be very interesting. But I also think, and not that you asked me this, I also think that it shows that the private practice is here to stay. And I think there will always be some balance between the private practices and the DSOs and the corporate practices. And it's mainly because you're going to see the type of correction that we just had, but you're also going to see an interest in quality. And while many DSOs are out there sort of going against what gave DSOs a bad name to begin with, which was lack of quality and being all about the margins. Now there are many DSOs that are actually really kind of purporting to allow the doctor to work in a way that they always have and to keep the quality the same. And I think that is very helpful for the DSO market to capture more of the private practices. But I still think that there's going to be the private practice being here to stay. And so that's my prediction. And I think that's what's happening right now with this correction that's occurring again. It'll all be interesting to see how it all plays out.

Yeah, I mean, I think that was a wonderful sort of comprehensive recap and really aligns well with what I'm seeing on my side as well. The interest rates and the financial mechanisms that these corporate players are leveraging to make these deals palatable and make sense for them both today and for their future recapitalization partners that they will work with in that next exit. Interest rates historically or today compared to the historical levels are actually still quite reasonable. It's obviously a much higher interest rate level than it was in 2020 when money was essentially free. But compared to the longer term picture, it's still actually below the average market rate. I think what you see a lot just in business in general, maybe you can even turn your focus slightly to the banking industry as a point of reference here. But you have all of these people that during good market conditions when money is cheaper, they overextend and potentially over lever themselves and maybe go against better business practices when they're in more normal interest rate and economic environments. And I kind of attribute this slowdown, yes, to interest rate increases and sort of that immediate impact that it causes their financial underwriting models and the things that they've ultimately leveraged to put these deals together. And then as the dust settles and the DSOs become smarter about the current environment, well, their valuation methods change. Right. The way that they estimate ebitda, the multiples that they're ultimately providing and offering in the market. But it's challenging to do that right as interest rates switch because you have so many players in the space that really haven't let the economic conditions change the way that they're approaching their new acquisitions. I think you have to give some time for the market to almost let people fail to some degree then that way. Now a new precedent is set in terms of what's being offered and their deals looking better in comparison to the other offers that they may have. I think that the timeline that you're referencing in April of 2024 being this switching point to seeing the deal flow pick up, I think is all aligned with that narrative to a pretty healthy degree. The comments that you made on private practices really not showing much of a downturn given their more long term approach and interest rates truly still being at a fairly healthy level historically. I'M definitely curious to see. I've been using the medical playbook back from the 80s, early 90s, even into the 2000s, as we watched that industry go through the same sort of consolidation period as we're watching dental go through today. I used the the metaphor. It's like charging a Tesla battery. The first 80% of the market to transition is super quick, relatively speaking, and then the last 20% takes a long time.

I've been very curious to watch the dental service organizations and the DPOs of the world and their approach to how they're targeting the next wave of doctors that they're ultimately trying to line up. I'm noticing a pretty big uptick in their direct marketing and direct outreach to younger doctors and younger associates before they even get out of residency. There's a lot of naivety, unfortunately, at that level before they're exposed to the broader market of what's possible. I see that as potential accelerant to getting that extra 20%. Not that we're 80% of the way through the consolidation period, but sticking to that same metaphor. All to be seen, but some really great points there that I appreciated. I thought it aligned really well. Then, on the DSO side or just in general, maybe, how are you helping your clients navigate those options that they may have available to them, whether or not they are coming to you with those options directly or they are coming to you with a single option? Do you take time to educate them at all on what other potential options are out there? Because I'm assuming that at this point, by the number of transactions that you do, that you've probably worked with a decent share of the DSOs that are out there right now. Yeah.

So just to clarify your question, are you asking, like, which DSO to go with, or are you more asking whether to sell to a DSO or to do a private deal?

That's a great question. I think it's a little bit of a mixture of both. You know, I think that there's this general sort of understanding that a DSO potentially offers more financial incentives. Right. And I know that you're not a financial advisor specifically, but at least on the DSO side of the legal terms drive the financial components, whereas in the private practice world, a lot of the financial components drive the legal aspects of those agreements. Anyway, just in general, David, just kind of understanding your process as you work through the deals that are coming across your desk with these dental clients.

Yeah. So, I mean, I would say for us, about 50% of the deals that we do are in the DSO realm, and about 50% are in the private realm. And so we love both. And I think that the key here is DSO deals are great for some and they're not great for others. And private deals are great for some and not as great for others. And so it really kind of comes down to who the doctor is, what their objectives are, what their practice situation is, and go from there. And so I would say that when, you know, I'll kind of address both angles of it to start with whether to sell private or whether to sell to a dso. There are several things that a doctor needs to look at. You know, number one, I would say that for a doctor that has a practice that is generating revenue at a level beyond what a private lender can lend, then they're kind of limited. Their option is bring in an associate doctor and have them buy in at, you know, in interval levels, at amounts that a third party lender can lend or sell to a dso, you know, so I mean, I think their option, their option of just selling 100% to a private buyer is sort of out the window if that buyer can't get the financing, you know, certainly the seller could carry a note for the remainder. It could be a big note, depending on the size of the practice. But I think that's sort of one thing that needs to be examined also. You know, you'd know better than me, but, you know, we're seeing probably 2 million to 2 and a half million is being the max, ish, for what a private lender would lend on a private deal. And that's, you know, probably the absolute max that we see. But again, you know, you may see differently. So first of all, the doctor has to examine that. The second thing that they've got to examine is, you know, what is their goal after the closing? Do they want to work after the closing or do they want to actually retire after the closing? And if the answer is they want to retire after the closing, you can pretty much foreclose investigation altogether on a DSO deal because nearly every DSO out there is going to require the doctor to work for five years after the closing. You may be able to get away with three years, four years. We've even seen two years in a practice of multiple doctors where one doctor is going to retire. And that was the plan all along, but the rest are going to stay. But really the typical roadmap here is a five year roadmap toward retirement. For a doctor that wants to retire, it's got to be at least five years. So for a DSO deal where a Doctor doesn't want to do that. It's just highly unlikely they're going to be able to do that. So the answer may be right there for them without a choice. And I'm going through this analysis right now because it's not always the doctor's choice as to which route they go, right. Sometimes other elements that are beyond their control are going to dictate which route they go. The other thing that's quite obvious is the practice has to be the type of practice that would generate interest from DSOs to even have the option. And the type of practice that would generate interest is going to be one that's, you know, usually generating revenue over a million bucks a year. Usually not Medicare Medicaid practice or at least heavily Medicare Medicaid, a practice that has been fairly consistent as far as its, its revenue. I think those are things that DSOs are going to look for. And then also too, if it's a specialist practice, you know, then there's only certain DSOs that might be able to buy it. The market may shrink on that as well. So I think, you know, that's the other element is, is the practice even going to fit the appetite of most DSOs out there. But assuming that all things are being equal and the doctor does actually have both options, then I think they've got to look at what their goals are. You know, from a standpoint of is, is money the most important thing to them? If getting the most money for their practice is the most important thing to them, the DSO route is likely going to be the best route. It's rare if ever that I've seen a DSO deal from an economic standpoint not be as lucrative as a private deal. That doesn't mean that all DSO deals provide money upfront at closing that would exceed a private deal. But I would actually say most of the deals that we do for dsos the doctor gets more at closing than they would for a private deal. And that immediately mitigates their risk going forward with the unknown, which is the stock that they're going to get in the deal. Any type of earn outs where they haven't earned that money yet and then any type of holdbacks that are being held back either for indemnity purposes or otherwise in a deal or so if they're looking for the most money, most likely that's going to be the route that they're going to go. If they're wanting to remain in control of their office or they want to carry on their legacy through another private doctor and they don't want to be part of the DSO environment or if they don't want the pressure that comes with the DSO deal. Because DSOs are typically backed by private equity. Private equity wants to see their investment appreciate and they want to see the practice doing at a minimum what it's always done. And you know, there's pressure associated with that. You know, certainly you, you take some of that pressure off by getting some money at closing. But any doctor typically out there, it's not always just about that. It's about just feeling the heat, you know, from, from, from, from the dso, checking in and finding out why something isn't the way it is. You know, we're on a deal right now. It's like, hey, why was doc down 200k, you know, in the past year, you know, that kind of thing. So it's something that needs to be examined by the doctor as far as like the pressure is concerned. So I think, you know, these are the factors that one would want to weigh whether they're going to do a DSO deal or not. It's. Is their practice going to be marketable to a dso? If the answer is no, then foreclose investigation right there. If the answer is yes, then what are the pros and cons? And that's where great advisors like you, like, I think my firm is a great advisor as far as that's concerned. Certainly not on the financial side, but more on the legal implications. And then there are other great resources out there in the legal realm as well, in financial realm. But I think having a team is really critical. Anytime I lecture or get on these podcasts, I always say the number one important thing is to have a team because either A, the doctor doesn't have the requisite knowledge to be able to optimally operate, or B in the rare case they do, they don't have the time because they're working and they're seeing patients and they're managing a practice. So I think having that team is really critical to help evaluate that with you if you're a doctor and to walk you through those steps. So that is how I would see, you know, the choice on that realm, you know, on that sort of spectrum, which is which type of deal do you do now? I lost my train of thought on the second.

I think, let me, I can pitch in here because I think when you mentioned DSO deals being more lucrative in terms of the more money upfront and potentially more on the earn out provisions as it relates to their specific practice that they're selling before that sort of recapitalization event happens and that has, to your point, gone from two years to three years and now more commonly five years as your DSOs get out of this sort of practice aggregation methodology and get more into building quality, what we call evergreen businesses that can have great operations that far expand past the selling doctors work back period. And then I would agree with everything that you mentioned there. One thing that I will add, and I've mentioned this in a couple other podcasts that I've done where DSOs are a point of topic, which is if you only look at the exit price in isolation and you ignore the economic components that happened during that five year workback period, then you're only looking at really 60 to 70% of the story. And what I see more often than not is when you look at the income loss during the five year workback period because you're going to ultimately be making a percentage of your production and you may still own a very small share, maybe 30% of the free cash flows at the bottom line. But when you look at that income loss, and now you're ultimately converting your income from being a corporation or a business type of income to more of a W2 income status, you lose a lot of your income tax planning sort of flexibility as well. So lower income and less tax planning efficiency. And when you look at that in comparison to the extra dollars that you receive or guaranteed to receive as part of the exit price, it ends up being really close to a wash when compared to a private practice sale. And where most people are making their money when they do is on that eventual second exit or the recapitalization event that happens after you have entered and fulfilled your obligations with that DSO company. Then that's where I feel it's still a little bit of this unknown territory for so many, because you have people like yourself who have gone through the legal components of the deal across almost all of the DSOs that are out there, but then translating those legal terms, they could be very small, very nuanced, but could have such a powerful impact to the end result of the financial economics of that deal. 1 I think I might have mentioned to you when we were chatting earlier, which was I saw recently in a few of my DSO deals with some of my clients that they were adding this provision that even if they had satisfied their five year work back requirement and satisfied the task of finding and bringing in a new qualified dentist to take over their responsibilities, that they weren't able to liquidate their carryover shares during that recapitalization event, they were forced to roll that equity into the new deal completely anyway. It's just very small nuances in deal terms like that that can be challenging when the connection between the deal terms and the financial components aren't widely known at this point. I hope as I work with people like yourself and continue to be in the space, we'll be able to help clients make more sense of that comprehensively. Any thoughts on those comments there?

Yeah, I think I'm in general agreement with all of that. And also too, to just add another layer to that, I would say that deals are changing. You know, we talked about the first thing that you asked me was what are we seeing in the landscape right now in the environment, and deals are changing on the dso. And you know, you're seeing. I talked about how there's been an uptick in this, you know, April and May, and that's been true. But the types of deals that we're seeing are way more, I would say, onerous on the seller as compared to prior. Not saying they're all onerous, but just as compared to prior, the terms are more onerous. And what I mean by that is there's less money upfront than there was before. There's more risk to the doctor because in order to lend or in order to pay, the DSO needs more control over the situation. And so there's going to be less money up front. There's going to be probably more in holdbacks, more in earnouts and more in stock. And the DSO is going to ask the doctor to have more skin in the game from a stock perspective. We're also seeing a lot more flexible operating agreements for the stock portion of the deal for the DSO and a lot more inflexibility for the doctor. And what I mean by that is the true traditional way that an operating agreement would work when we're talking about a recapitalization event was that the Dr. If the DSO want to enter into a recapitalization event, the Dr. Would then usually get dragged along through what we call a drag along right in the legal term terminology. And that and a drag along right just means that the DSO gets to force the doctor to sell with them. And that you find in every single DSO deal. I've never seen a DSO deal that doesn't have a drag along right for the dso. And that's because they need to be able to control a sale and they can't have doctors blocking their sales and limiting their marketability. And so that's always going to be there. But you'd have that. But then you'd also typically have a tag along, right? Where if the DSO didn't force the doctor to sell with them, the doctor could exercise a tag along, right? And tag along and jump along and say, hey, well I want to, I do want to participate even though you're not forcing me to. That was kind of like the all things being equal, as fair down the fairway, down the middle as we possibly could do. And then even, even more so and very importantly, the doctor would get to participate in the same, you know, under the same terms as the DSO from a price sale perspective and also from how much they're selling perspective and also whether they are going to take cash and, or stock rolling over into the new buyer. And so that's kind of the traditional how, if you want to say let's create the fairest, most reasonable dynamic, that's kind of what it would be. It doesn't mean all DSS operated that way. I think the most fair ones did. But now you're seeing far different. You know, we're seeing documents where, you know, there is no tag along, right? And it's only drag along, meaning only the DSO can pull the doctor along. If they don't, then the doctor sits there with their stock. They don't get to participate in that event. And then on top of that, the doctor doesn't necessarily get to participate in the sale of as much stock as the DSO does. And then even if they do, they don't necessarily get to sell on the same terms as the DSO in terms of cash versus stock. Right? So like technically, if that's the case, the DSO could say, okay doctor, we're going to drag you along with us. We're going to make you roll over all of your shares and stock to this new company and we're going to take cash off the table. You know, and that is a problem because then the interests aren't aligned. You know, you want to be pari pursuit, you want to be aligned with the DSO if you're a doctor, because then that's the safest thing. Regardless. If you're a doctor and you're doing a DSO deal, you are going to have some risk in the sense that you're putting your stock in the hands of the DSO and you're trusting that they are going to do right by themselves and by everybody and that they're going to make the best decisions, they're going to grow it and they're going to create a great liquidity event for everybody. And that's okay typically if all interests are parallel. But when they're not, that's when you have to worry. And it doesn't mean that the DSO won't do the right thing. It's just that they've carved out the flexibility of themselves to not have to. And I think that is a huge difference from what we saw before. Again, it doesn't mean there weren't some DSOs that had that type of dynamic before. And like, there's plenty that didn't have tag along rights. But now you're seeing it more and more. And so now these deals become more speculative. And when you're taking it's one thing if the doctor is getting 90% cash at closing, well then sure, you know, I mean, the risk is significantly mitigated even if they did get screwed on the stock side. But you know, when you're now saying, well, the doctor's getting 50% cash up front and 50% in stock and you know, earnouts and all that kind of stuff, well then it becomes more important for those, those terms of the operating agreement to be fair. And unfortunately we're just not seeing a lot of that. And I would say on top of that, it's hard for these DSOs to change their operating documentation because typically it's not necessarily just within their control. It's often the private equity behind them. And then also too, it might be unfair to others if they were to change things. So I think that's the dilemma. I think it remains to be seen if this sort of levels out and things kind of smooth out after this. It's almost like they're peeking their head out and trying with some onerous terms and then maybe it kind of levels out. But that's one inherent issue that we're seeing. Doesn't mean the deal's a bad deal for the Doctor. They have to look at the totality of the circumstances and the entire thing and say, you know, maybe that's fine, maybe the deal still works for them under those dynamics. And again, Most of these DSOs are probably going to deliver in a fair manner. If they didn't, no one would do their deals. So they probably will operate fairly. But you know, as a lawyer, I have to sit there and say, well, what does the document say? Because that's really what, what the law is and what governs so.

Right, right.

You know, that's, you know, just kind of expanding on what you were talking about. I did want to explain how the landscape from a legal documentation perspective has changed and how these deals are changing, but it's also probably how more of these DSOs are able to now do deals. And so, you know, you kind of take the good with the bad there.

I mean, that was about as. That was probably the most detailed explanation of the sort of emerging landscape that I'm seeing. As told by someone that's on the legal side of that equation. You put it a lot more eloquently than I did. I really appreciate you expanding on that. I think that you're right. I think that we're in this phase of let's see.

What we can get away with now, to your point, it doesn't mean that they'll exercise the nth degree of how flexible they've created these relationships. But at the end of the day, these private equity companies, for the most part, they're only a part of this game for five to seven years, and then they turn the coin over to somebody else and it's someone else's problem, so to speak. That's really where I start to run into additional roadblocks that didn't used to be there, which is it becomes such a. From a financial perspective, it becomes such a speculative forecast for the sellers that it's really challenging to give them this boat of confidence that they're looking for to go forward with that transaction. It's not that I think that we would both agree that I'm not necessarily anti DSO or 100% pro private practice. I think that in capitalism you've got to have competing market forces to create the best environment possible.

I think that we're seeing two players try to do the best that they can in that space. But I have felt that it's created a very challenging speculative exercise for going through these and making it a little bit more challenging to look at all of the opportunities that they have available and help guide them to one that makes the most sense for them. And I think the last thing I want to touch about just on the financial side of the equation is that we have had very few transactions that are north of $500 million to date. Right. There's been a few. Right. And there's probably. I think there's. I don't want to misspeak, but I think there's one that was approaching a billion dollars and the whole financial game of consolidating practices to increase the EBITDA multiple that's going to be ultimately given by the next private equity company that will be purchasing them during that recapitalization event. Well, once you get to such a high valuation Level of say a billion dollars. Whenever you've ever heard the term a unicorn, which is what they describe a private company that's enterprise value is $1 billion or more before they become publicly traded. Knowing that most of your deal incentive right after the work back period, all the income loss and things that we talked about is on that recapitalization event, or maybe even a second one, depending on how much you roll over, how much stock you roll over in that new deal. So much of that upside is based on those second exits and third exit, that when we're talking about these larger companies that really do have the most marketing dollars behind them, the most outreach to private practice sellers, it's like, are you really going to be able to get that 3-4x return on the retained stock like you did when that company was only worth 50 million? You almost get this too big to succeed. As it relates to the broader DSO promise on those third liquidity events.

When you think about the changing the evolution of the deal terms and then becoming a little bit more favorable to the DSO side, you almost wonder, and then you compare that to some of these more grassroots homegrown private practice owners that are grouping together to build their own quasi DSO through equity exchanges as opposed to exchanging dollars upfront. But they're creating more of a general partnership environment as it relates to the flexibility, the transparency, and ultimately their ability to share in the favorable deal terms alongside the founding partners. You're in real estate, so it's kind of that same general partner to limited partner exercise that you go through and recap, or you refinance a commercial building and then potentially pay out the limited partners and not let them participate in the remaining upside of that deal. Anywho, I think that when I'm looking at DSOs in general, from just a pure financial standpoint, I have almost tilted towards the ones that are, number one, more transparent, number two, that continue to create an environment where everybody shares in the upside equally, at least as it relates to their equitable inputs, and that aren't so large that this financial mechanism of consolidated EBITDA growth is still there without having to step into, okay, now this person is going to have to be potentially publicly traded or be worth $10 billion as a private company. That whole exercise becomes a little bit more palatable when you look at it from, from that lens. But maybe we switch gears a little bit, David, and talk about more on the private practice side and some of the evolutions and things that you're seeing on that side right now.

Yeah, on the private practice side, we're still seeing a lot of growth and a lot of buyers, and we're actually seeing a lot more partnerships as of late. And I think that that is attributed to, I think, younger doctors. And I'm just, you know, this is what I'm seeing, and I'm guessing I certainly don't have facts to substantiate this, but we're just seeing younger doctors that are interested in ownership but don't feel completely ready yet to be autonomously owning a practice. And they want the mentorship from the other doctors that are involved and to be part of a partnership and then to go through the evolution of buying those partners out down the road. And I think that that's definitely a model that we're seeing an uptick in over the last, I would say, you know, six to nine months or so. And so that's something that I don't think was as active as just the private 100% sales. But now we are seeing, and I think that was very active probably five to eight years ago, and then it shifted a bit and now we're just seeing that being a lot more active. So we're seeing a lot of that. And then we are seeing a lot of the 100% sales that's still growing for our practice. We're seeing more than we have before. And I don't think that's. That's slowed down, you know, in a similar way to, to the private practices, but I definitely see that there's a huge demand for ownership. I think the younger doctors that we're seeing are very interested in entrepreneurship and ownership and the business side more than ever, I think. And so I think there's just a huge hunger to own. And I also think that a lot of younger doctors want to secure their place to be able to own. And so by being an associate at a practice and getting in the flow and being in a scenario where they can, they buy in, I think almost like reserves their place with, with a great practice a lot of the time. And then on the flip side, you're seeing a lot of doctors that are the senior doctors that are already owning the practice. And I say senior, not necessarily age wise, but, you know, just meaning they were there first and they were owning first, usually of a greater age than the doctors that I'm referencing. They are also looking to secure their future and they're looking to bring in great partners, great associates that can come in and be very helpful to grow the practice and to eventually buy them out down the road. And that is a great strategy for a lot of doctors. So I said it before, I think DSO deals are great for some and not great for others. And private deals are great for some and not for others. And I think the private realm from a partnership standpoint is definitely very vibrant right now as well as just the 100% sales. So that's, you know, those are the things that we're seeing, I would say, I would also say that we are seeing and I don't know if this is coincidental or not, but we are seeing a lot of doctors stay after selling to a private buyer 100%. We're seeing them stay on as associates more often than we did before. And we're also seeing more of a meeting of the minds on that. You know, before you had this challenge of okay, does this, does the selling doctor want to stay? If so, does the buyer want them to stay? Can the practice accommodate multi doctors? Right. You know, now we're see. Or vice versa. You know, it could be that the buyer needs them to stay, but they don't want to stay. Now we're seeing a little more of the doctors being on the same page. And the same page is entailing usually working back in the practice afterward. And I haven't quite put my finger on what the reason is for that, but. And again it could be coincidental but we are seeing a lot more of the work backs in these deals occurring. So I mean that's, I can certainly get into more specifics or you know, answer questions about it, but I think that's the general landscape of the private deals that we're seeing.

Yeah, it's interesting that you said that because I, it's such a common theme is, you know, that I never saw three plus years ago, which is both the sellers and the buyers really wanting to keep that person in the practice and they're doing so two, three years after the close. I'm not really sure exactly to your point why that relationship is happening more frequently. I'm curious because when I look through your brokerage, all the brokerage houses across the US and then you've got practice listing aggregators provide is a financing institution for dental practice purchases and they have the home built practice listing aggregator so to speak where they kind of just aggregate all the broker websites across the US into one sort of searchable place. When I'm reviewing that, maybe my focus is a little bit more on the west coast. So maybe it's a little biased here. But I'm seeing less and less private practices on these platforms. But to your point, you're still seeing a very similar deal flow. So I'm wondering almost if the nature in which people are being connected or getting connected to consummate a private practice sale is changing to some degree. Do you have any thoughts or insights on that?

Man, that's a really good question. I don't know the answer to that today, but it's interesting. It'll always be interesting to catch up with each other at another point down the road. I probably will have that answer, but today, I just don't know.

Yeah, it's to be seen. But something to keep in mind, though, as we keep moving forward here. Well, David, it's been such a pleasure, man. I want to give you the space to share any last thoughts that you may have. And please share how people can get connected to you if they want to work with you in the future.

Yeah. So, first of all, thanks so much for having me. And as far as last thoughts are concerned, I would say that it's important to look at the trends and I'm really appreciative that you've done that with me today because oftentimes you're just running 100 miles per hour. You're just doing what you have to do to serve people, and you're not sort of looking at the trends and taking a step back. And I think that's really important to do. So I appreciate you doing that. And you know, as far as getting in touch is concerned, we have a website. It's www.cohenlawfirmplc.com c o h E N L A W F I R M p as in paul double lc.com my cell phone, I always give this out on podcasts and it's not yet today been abused. So I'm going to continue to do that. My Cell phone is 206-919-9060 to be in touch. And then, you know, we also have a Facebook group called Practice Transitions Revolution. And that's really intended to just be a safe space where people can share about transitions and really collaborate. And I just talked about how it was cool to talk about trends. Well, I think that's another good place to, to look at what's happening out there. And then we do a ton of commercial real estate. You know, we, we do just as much commercial real estate as we do dental, because there's a commercial real estate element to all these deals. And we have a commercial real estate firm, it's Cohen Property Law and www.cohenpropertylaw.com so, I mean, I think those are all the best ways of contact. And, you know, certainly I can't thank you enough for having me. I feel privileged to be on this. And little do the listeners know that this was our second go around because my technology was not up to par. And I'm just very thankful and relieved. I was like losing sleep over it before today. I was like, this better. You know, we're going to make this work today. So I'm really glad that it didn't even cut out once.

Likewise. Man, it was such a pleasure to have you. So, so much insightful and forward looking comments that you gave us today. And a lot of also a lot of great platforms for people to circle back to and get even more information in the future. So thanks again, David, for joining the show. Until next time.