How to negotiate partnership in group practice?

[IDCARE]

Hello Friends,

 

1.5 years ago I joined a group pratice as an employee with 2 year partnership track. Now am 6 month closer, I come from business oriented family, always wanted to do business, This is fully established practice with heavy patient load, my contract with the employer is not non-compete so I have room to start my own practice. I have already clarified with my employer that I will leave the practice and start my own if no partnership is offered. I believe he can't afford to lose me from the group because of the work load and too much burden will fall on him. I am pretty sure he will offer me a partnership, personally I believe current owner of the practice is very greedy person by nature, but I am comfortable as long as he offers me reasonable share in the practice. Also our quality of life will be better with group practice by sharing calls rather than solo practice in which I will be completely occupied and will have no social life. What percentage of share I should expect if we are 3 partners? What are the small issues I need to be aware of? Or should I leave this group and start my own? Advise from experienced people will be really appretiated. Thank you.

[The White Coat Investor]

IDCARE wrote:

Hello Friends,

 

1.5 years ago I joined a group pratice as an employee with 2 year partnership track. Now am 6 month closer, I come from business oriented family, always wanted to do business, This is fully established practice with heavy patient load, my contract with the employer is not non-compete so I have room to start my own practice. I have already clarified with my employer that I will leave the practice and start my own if no partnership is offered. I believe he can’t afford to lose me from the group because of the work load and too much burden will fall on him. I am pretty sure he will offer me a partnership, personally I believe current owner of the practice is very greedy person by nature, but I am comfortable as long as he offers me reasonable share in the practice. Also our quality of life will be better with group practice by sharing calls rather than solo practice in which I will be completely occupied and will have no social life. What percentage of share I should expect if we are 3 partners? What are the small issues I need to be aware of? Or should I leave this group and start my own? Advise from experienced people will be really appretiated. Thank you.

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I think your mistake was signing on for a partnership track with no clear definition of partnership. In my view, you ought to be eligible to be a 1/3 equal partner. That might cost you some money, but the amount should have been defined a year ago when you signed the employment contract. I guess if the employment offer was just as good as anything you could have gotten anywhere else, then no biggie. But in general a pre-partner position doesn't pay as well as a non-partnership track position.

[The White Coat Investor]

Of course, that doesn't mean this can't all still work out. But I'd define the relationship sooner rather than later. I would also be hesitant to partner with someone I felt was greedy. A medical partnership is a lot like marriage in many ways. Would you marry someone that was greedy?

[Seroma]

Best thing for u would be equal shares, however you have to see things from the perspective of the owner who formed the group and you should know if the current partners have equal shares.

You mention that you don't want to start your own group as this would mean that you will be literally on call every day and have no social life....well probably that's what the initial partner did and I do believe that if we see things that way then the initial partner should have a better deal than the others (maybe less call or more vacation or more money). I also understand that they need you, otherwise they wouldn't have hire u. The 2 other partners have probably better lifestyle because of you, however people that formed a new group made significant sacrifices to accomplish what they have and they should be rewarded for it....at least the way I see it.

Good luck.

Disclosure: I'm a partner in my current group and have equal shares but that was established in my initial agreement as an employee.

 

[s2km]

You're in pretty much the exact situation I just dealt with.  I also didn't have clear partnership terms in the initial contract...just that partnership would be offered without specific terms.  I signed in faith that we would be able to work something out.   The practice is similar in that there is busy with large patient load, and I have definitely helped to grow the practice.  Fast forward to now and I decided that partnering with the guy probably wasn't in my best interest.  He is also very greedy and it became clear in the negotiations that basically he just wanted to keep making money off of the volume I'm contributing.   Unfortunately I had a non-compete clause which limited my options around the area, so I did negotiate terms to stay on with decently better pay than my initial contract without a non-compete and am taking it year by year.

You're in a better place negotiating as you don't have a non-compete.  If he really is motivated by greed, then I would definitely think twice about partnering as he'll never have your best interest in mind and you will always be questioning motives.  I've slowly started to realize that unless you're running the show, you'll never truly know exactly how things are being calculated and all that.