You’ve just entered into a new medical practice partnership and everything seems great. But as the seasons change, differences will likely develop among the medical practice partners regarding both short and long term goals along with management styles.
While there’s no sure-fire way to prevent a bad medical office breakup, you can reduce the pain if you put as many ground rules as possible in writing from the very beginning. It can be time consuming and an otherwise difficult conversation to have with your colleagues, but it’s a conversation that needs to happen. It won’t just help with the break-up, but will also help with the medical practice’s operations. Thus, consider carefully drafting your medical partnership operating agreement and address the following:
-Each partner’s initial investment and percent of ownership
-How salaries will be paid
-How profits & expenses will be handled
-Fringe benefits, vacation time and CMEs
-Call Coverage
-Staff hiring procedures and decisions
-Marketing
-How disputes will be resolved (both large and small)
-Who has check-signing authority
-A termination clause
-If a noncompete is executed, be sure it is thorough and clear
-How the practice will be valued
By implementing a detailed operating agreement, you can avoid problems that come from lack of communication and planning in a busy medical practice.
