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Private Practice Conundrum - in seek of some sick wisdom

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  • Private Practice Conundrum - in seek of some sick wisdom

    I've been a partner at my current practice for a little over 5 years.  It deems itself "democratic", but the practice doesn't really operate that way.  Hires are made, contracts picked up/negotiated, and logistical details of the group determined by less than a handful of docs in the practice.  I find myself almost always at odds with the decisions and have gotten into very heated arguments over some of the decisions made.


    This same group of docs have recently decided to buy a $650k house on behalf of the group.  Their reasoning being that it's a financial wash after taking into account what we would pay in rent for our practice manager as we get to keep renting out the rest of the house to lawyers that currently have a satellite office there.  Aside from the small group of docs  making all these decisions, the rest of the group was largely kept out of the loop until right before the closing.  I was the only rad aside from our "leader" who actually went and looked at the house. Just last night an email was sent out to the group mentioning the purchase was done and a separate LLC was made to buy the house; the contract for the purchase of the house/formation of the LLC was attached for all to sign and I seem to be the only one in the group who cares how this happened.

    Is this the way a majority of groups operate?  Am I being unreasonable for thinking that decisions like this should be addressed by all of the partners?

    For a few years now I've found that my timeline with this group is going to be very short, but my family is so embedded in the area that I find my options relatively limited since getting up and leaving would be a major stressor.  Financially we are ok.  I'm not at full FI, but if I stuck it out a couple more years with this group and kept socking it away at the same rate, we'd be there.  I just don't know what my endgame is going to be.  I could go part time with the same group at that FI breaking point (or maybe sooner), but I feel like i'll have too much ill will built up inside toward the group to stay in any fashion with them once i'm ready to leave; maybe that will fade once I relinquish my partnership and become an employee, but doesn't seem particularly appealing to me at least at this point.

    There is another group in the area that may be an option, but they own a ton of equipment so the buy in is not going to be small.  Plus relinquishing my current partnership to start a new tract is less appealing financial wise not only due to the partnership $ lost, but also by putting myself in jeopardy with regards to ownership status in this environment of practice "buy outs".

    I'm really struggling with how to handle this situation.  Any advice?  Thoughts?

  • #2
    Get out asap, either the other group or telerads. Even if you make less money, you say you're close to FI anyway. I doubt the situation is magically going to improve

    I don't get the purpose of the house. So you are renting it to the practice manager and the lawyers who have an office there? What do the other partners think about all this?

    What do your groups bylaws say about how these things are handled voting wise? Are you actually a partner and being kept out of voting or is there like a pseudo partnership.

    Comment


    • #3
      can still be democratic with decisions that are being made by an elected board.

      but purchasing rental property and creating an LLC certainly sounds like something that is a group decision, not day-to-day operating business of the board.

      you've expressed your options, that is up to you which to pursue.  I guess I'd just toss out that if nobody seems to care that a handful of people are railroading the group, who is going to care or hold ill will about you being part-time?

      welcome to the forum, keep us updated.

      Comment


      • #4


        Hires are made, contracts picked up/negotiated, and logistical details of the group determined by less than a handful of docs in the practice.
        Click to expand...


        btw, can you imagine the chaos and inefficiency if every member of the group had to weigh in on these things?

        Comment


        • #5
          In larger democratic groups, there is often a managing board, typically senior partners who make the operational decisions for the group at large. Bigger decisions (like purchasing property, M&A, new contracts or relationships) often require a vote of all partners, but not necessarily. You need to examine the operating agreement of the practice and the bylaws of the partnership to see what your rights are as a partner.

          In some partnerships, everyone is financially a partner (an equal from the standpoint of profit sharing and such), but the decision making is down by a small board of select partners. They may be elected or appointed. If you are interested in getting involved in governance, perhaps you should inform a senior partner and find a mentor to groom you for the role.

          If you think about it, for a large group, if everyone had input on every decision (like buying this house), nothing would ever get done. Do you know what you call a 10-1 vote in a democratic physician group? A tie.

          Comment


          • #6
            Thanks for the responses so far.

            As a response to the question of why we're buying the house, I really don't have a good answer for you.  Only what I posted earlier, which is to keep an office for our manager.  We actually had discussed at a meeting earlier this year whether we wanted to keep renting or try and buy a place.  We didn't have a vote at the time and it's not recorded in the minutes, but the group had decided (meaning just some grumbling from various docs) that we should just keep renting.  This isn't the first time this idea was floated and the decision to not buy a building has never sat well with the doc who has spearheaded this purchase.

            Just some extra details on the group; we have 12 partners so not very big but not super small either.  Every partner is and always has been (since i've been a partner) on the board of directors.  It's for the most part a couple people in the 4 person executive team who are making a lot of these moves and decisions for the rest of the group.  In our bylaws it states the executive team can "....make recommendations to the board....on matters.....in excess of $10,000" and also "perform other functions as the board may from time to time assign to it".  To me it seems that this team has extended themselves far beyond what they're legally allowed.   Although i'm not sure if by forming this new LLC they maybe haven't technically done anything legally wrong.

            I'm not really involved in being involved in governance per se.  But I would like for decisions like these to be addressed to the group in general and hold a vote.  I'm fine if we don't all agree.  I've even told our president that I would have been ok with this purchase if we just had a vote and majority decided.  It's the way we operate that bothers me.

             

            Comment


            • #7




              Just some extra details on the group; we have 12 partners so not very big but not super small either.  Every partner is and always has been (since i’ve been a partner) on the board of directors.  It’s for the most part a couple people in the 4 person executive team who are making a lot of these moves and decisions for the rest of the group.  In our bylaws it states the executive team can “….make recommendations to the board….on matters…..in excess of $10,000” and also “perform other functions as the board may from time to time assign to it”.  To me it seems that this team has extended themselves far beyond what they’re legally allowed.
              Click to expand...


              Yes, your group is now considered small (I work in a similar size rad group), and our partners are likewise all on the board of directors. If the executive team purchased a house, without a vote of the board (ie. all partners), there would be pitchforks and torches.

              https://pastorhoward67.files.wordpress.com/2013/07/simpsons-mob-torches.jpg

              Comment


              • #8
                I am in the process of becoming a "partner" in a similar type group, where one person makes all the decisions, one person does the least amount of work, gets the most money, etc.   It is annoying, people write their partnership contracts in such ways that favors themselves and when it comes time to come up for partnership, your choices are usually just to sign on the dotted line or leave.    I contemplated leaving my group, but the problem is, after you put in all these years into a group with the promise of becoming partner, you end up having to start all over in another group, if you can even find another group where you want to be working at.   In the end, I don't really see myself as a partner in my group, just a higher paid employee.   If your partnership is being sloppy and not operating out of the bounds of what they agreed upon, I think that your options are either to fight them legally which would obviously poison the partnership relationship and result in you probably having to move on, or trying to negotiate and reason with them.   My partnership is written in such a way that the group requires a super majority, 66% to make any major decisions, and my boss has over 40%.   Thats why contracts are only as good as the people behind them, because in the end, I don't think that most of us want to go through the legal cost/time/ loss of relationships to do battle over them.   I might be inclined to hint that I was speaking with an attorney if they really are making decisions that the rules state that they cannot, that usually gets peoples attention.  Otherwise, if the group pays well enough and you like the job and you don't see things as too unfair, it maybe easier just to keep seeing yourself as an employee with some ownership in the group.

                Comment


                • #9
                  It sounds like you need to vote on a new board. If you start grumbling to others, they may have the same concerns over direction. We have a similar setup and at times i feel like this happens in our group. Not to this extreme. You just have to overcome people's inertia to change. A change of leadership from time to time can be very beneficial.

                  Comment


                  • #10




                    and I seem to be the only one in the group who cares how this happened


                    The situation you describe sounds totally out of line to me, but of 12 partners you admit you’re the only one that is bothered?

                    something doesn’t add up

                    If you’re really on an island with your opinion you should ask yourself why. Perhaps you’ve got a bunch of passive, ineffective partners who are fine with the situation, and one or a few decisive folks that, for better or worse, are gonna lead.

                    If that’s really the case you can either plan your exit, or choose to become a leader.

                    Comment


                    • #11
                      You have 12 partners in a group so 12 personalities and 12 different levels of risk tolerance. Having a small board making executive decisions makes sense in such situation. Keep in mind they spend extra time in after hours meetings, discussing strategies, evaluating and researching business growth options, and accepting risk that decision may be bad and they would be criticized, etc - so you don't have to. So if board's decisions lead to business growth, larger market share, and/or higher income to all partners then let it go and enjoy the ride as a passenger.

                      Comment


                      • #12
                        What you describe is typical for Medical practice groups.  Even though, in theory, all partners are equal, a few (in my office just one) are more equal; like the pigs in Animal Farm. The reason for this is that the junior partners are busy practicing medicine and as long as things are going well and everyone is making money, they are content to let the alpha docs run the practice. The problem comes when the junior partners eventually challenges the senior doc(s) it can get unpleasant.  Just last week, by a majority, we voted to do something that our senior partner was against and he is now threatening to retire.

                        Comment


                        • #13
                          The practice manager wants/needs an office.
                          • New Office building or continue to rent
                          • Buy a house and rent to a law firm

                          Sounds like the partnership informally turned do the former and approved the latter 11-1 on the informal vote tally. Everybody signed.
                          Too bad they didn’t consider renting an office.
                          •Is this impacting your compensation?
                          •Can you informally get the votes to sell the house at the next board meeting?
                          •Is it a battle worth fighting?
                          •Do you think office politics are different in any organization?
                          •Make career decisions based on your long term best interests. Heavy financial price to pay at this point. Don’t sweat stuff that doesn’t impact you significantly. Get involved when it does.

                          Comment


                          • #14




                            Just last week, by a majority, we voted to do something that our senior partner was against and he is now threatening to retire.
                            Click to expand...


                            People like this are the worst. I'd probably go ahead and schedule and throw him a retirement party with a 'The Boy Who Cried Wolf' theme.

                            Comment


                            • #15
                              Options as I see them:

                              1.  Keep caring about the way the practice is run and keep making money = more money, more frustrations.

                              2.  Enjoy not being in management and keep making money =  more money, less frustrations.

                              3.  Leave practice for greener pastures = Less money and unknown change in frustrations.

                               

                              This is a business.  Make a business decision.  It sounds to me that you are emotional over not getting your voice heard.  You don't like some of the decisions, but is the problem the decisions being made or the way they are being made.  If it's the former, then you have to make a decision if you'll lose more from the decisions or the transition.  If it is the latter, you need to decide if you can rework your mindset to a point that you can reduce your frustration at being left out of the process or you cannot, and if not, you have to decide what the price of those frustrations are and if you are willing to buy your freedom from them at that price.

                              Best of luck.

                              Comment

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