Partnerships: Give a Little, Get a Lot

Once upon a time, I was the imperial overlord -- in my office anyway. As sole owner of a primary-care practice, if I felt we needed a day off, I closed the office. If I wanted to buy something, I bought it. I had absolute power.

And absolute misery. Have you ever heard it said that the owner of a business is the last one paid? It’s true. You get what’s left over after the bills and staff are taken care of. Any mistakes I made came out of my paycheck, sometimes whittling it down to nothing. As much as I enjoyed and excelled at being a physician, my administrative weaknesses drained my salary.

Today, I have two partners. We each own a third of the practice. I can’t make unilateral decisions, and sometimes I have to be the peacemaker between my partners. There are more meetings and things happen much slower than they used to. But my take-home salary is much higher, and our overall practice direction is great.

But why go with partners over employed physicians?

• Your partners are motivated to do things that will increase the practice’s bottom line. As their piece of the pie grows, so does yours.

• Mistakes are often caught before they are actually made. Multiple perspectives make it harder to do dumb things.

• Each partner brings different talents. You may not be too swift at reading a contract, but your partner may excel at it. Or you may despise slogging through the financials, but your partner’s interest may be your financial gain.

Certainly, there are negatives. You will probably spend more time with your partners than you do with your spouse. Remember, medical partnerships

can

fall apart for the same reasons that marriages do: poor communication, selfishness, or just plain incompatibility. Also, your partners have the ability to take advantage of you like no one else if you are not careful. For these reasons, make sure you stack the odds decidedly in your own favor when adding partners.

Here are some things I learned after going through the partnership process twice:

• Don’t rush. Some physicians feel that after working two to three years in a practice, every physician should always have a chance at partnership. This is false. If a physician simply wants to “be a doctor” and has no interest in owning and running the business, then keep him where he wants to be.

• Clarify expectations up front. What does it mean, exactly, to own a part of the business? How much administration time will be required? What roles will this new partner take in your practice?

• Set up the income-division formula very carefully. You need to consider the amount of work a physician does; but a partner should also receive some income simply because she owns a portion of the business. In general, the formula needs to reward hard work and also allow for physicians to scale back without becoming a burden on the rest of the practice.

• Get lots of advice. Executing a buy-in is complicated and fraught with potential pitfalls. Definitely seek expert help here. But here’s the basic question: Should you have a hard buy-in number, or should you do it as a sliding percentage? The best number is usually one where both sides equally suspect the other got a slightly better deal.

Remember, you worked hard to build the business, taking a lot on your shoulders at the outset. If other physicians want to join you, you must have done something right, so don’t sell yourself short during negotiations. No, these negotiations won’t be easy. But when done right, the benefits of adding partners far outweigh any of the potential burdens, and ultimately, you’ll find that you are less stressed and much more content.

Robert Lamberts is a primary-care physician with Evans Medical Group in Evans, Georgia. He is board certified in internal medicine and pediatrics and specializes in the care of adults, pediatrics, diabetes, high blood pressure, asthma, preventative medicine, attention deficit disorder, and emotional/behavior disorders. Lamberts serves on multiple committees at several national organizations for the promotion of computerized health records, for which he is a recognized national speaker. He can be reached at rob.lamberts@gmail.com.