We all hear the dirge regarding associates…..all the plans to turn them into partnerships fail miserably! While this is the commonly held belief, it isn’t always the case. Some associates go on to be very happy partners and help to grow even more successful practices for both parties. What is it that makes so many fail and so few work? The key ingredient seems to be an honorable and fair agreement. Here are a few things we’ve learned about creating a good future partnership.
For the Primary Doctor:
- Don’t listen to your friends! I know this may sound silly, but I’ve seen many a good intentioned doctor let friends turn a great initial agreement into a nightmare final product. Your friends do have your best interest at heart….and that’s the problem. For an associate agreement to work, the best interest of both parties needs to be considered. The best example of why not to listen to friends came from a doctor I knew a few years ago. He told me he got all his ideas on his associate contract from his best dentist friend. His friend the dentist had four failed associates to her credit…..and he was taking advice from her!
- Get a valuation of the practice before the associate comes on board if the plan is for partnership in a year or two, and be transparent regarding the amount. A valuation received after your associate has spent one to two years working hard to grow the practice is basically asking him to pay for gains he created, in addition to those you created…..not very fair, is it?
- Plan to make the partnership 50/50 when the time comes. Buying in at 49/51 is just moving to a much more expensive associate position, unless there are very clear provisions in the contract for who makes what decisions……. and the responsibilities are equally allocated.
- Don’t just remember the golden rule; also remember what it was like for you as an associate. Partnership isn’t the time to turn into the people you resented in the past, it’s the time to be the doctor someone wants to work with in the future.
For the New Associate:
- Never sign a contract that has not been reviewed by your own attorney. The doctor hiring you may well be the most honest guy in the world, but an attorney helps to insure you have no missteps along the way
- Don’t be afraid to ask for what you feel you really want. Being very honest now can save you lots of aggravation and misunderstanding down the road.
Remember this doctor is considering selling you a piece of “his baby.” Be patient, calm and respectful ……..understand you have a great deal to gain by joining a good practice.
