Partnerships in dental, medical, veterinary, and optometry practices almost always start off with great enthusiasm. Unfortunately, disagreements between partners can derail even the most promising partnerships, sometimes almost immediately and, other times, years, or decades down the road.
Before you take on a partner, you should have a solid plan for how you will deal with disputes that could arise in the future. Failure to plan for potential conflicts can be a costly and emotionally draining mistake. In a worst-case scenario, you could bankrupt your practice and end up embroiled in extended litigation. A lawyer with experience in forming dental and medical partnerships can guide you in creating a solid partnership agreement that will help you avoid partner disputes and provide more constructive ways to resolve them if they do arise.
Some things in life shouldn’t be rushed. It’s risky to start a dental or medical partnership without first thinking through whether you and your potential partner are compatible enough to create a thriving practice together. Do you have similar short- and long-term goals for the practice? When do you expect to achieve those goals? What are your financial expectations? Is your partner someone you would enjoy working with every day?
The simplicity of a handshake agreement with your new partner may be tempting, but it’s not worth it. If you don’t have a written partnership agreement, you leave yourself wide open to misunderstandings and disputes in the future that could derail the partnership, endanger the practice itself, and lead to costly litigation.
A well-drafted partnership agreement will provide a clear understanding of:
You could create a do-it-yourself partnership agreement using forms you find online, but using a one-size-fits-all approach will leave you vulnerable to future disputes. A lawyer who has experience working with dental and medical partnerships can help you anticipate problems and plan for how to handle disagreements before they blow up into full-scale disasters.
The most common disputes between partners in dental and medical practices include:
All of these potential problem areas should be addressed proactively in your written partnership agreement. A good partnership agreement provides a solid foundation for your practice and helps manage each partner’s expectations about how the partnership will operate and what their roles will be.
These items should be included in your partnership agreement and related written documents.
Putting the terms of the buy-out provisions into your partnership agreement or creating a separate buy-out agreement (also called a “buy-sell agreement”) at the outset will reduce conflict and prevent uncertainty in the event of a future buy-out. Your buy-out provisions should address these questions:
Alternative dispute resolution (ADR) methods, including mediation, arbitration, and negotiation, are usually less expensive, less time-consuming, and less stressful than litigation. These methods can help partners better understand each other’s positions and may lead to creative solutions. ADR may not only keep you out of court, but it may also be able to save a partnership by resolving disputes before they lead to dissolution.
By thinking about the methods you will use to resolve disputes before they arise and including dispute-resolution provisions in your written partnership agreement, you will have a ready-made plan you can turn to later in the heat of the moment when it may be harder to make decisions -- and prevent further disagreements, on top of the original dispute, about how you will proceed.
The ADR methods you can agree to use include:
Thinking ahead now about how you will resolve disputes in the future will go a long way to helping you handle problems effectively and keep them from spiraling out of control.
The medical and dental attorneys at Dental & Medical Counsel have extensive experience working with dental, medical, veterinary, and optometric partnerships. We can work with you to create a comprehensive written partnership agreement, tailored to the specific needs of you, your partners, and your practice, that will anticipate and help resolve disputes before they arise. We invite you to schedule a free consultation with attorney Ali Oromchian or contact us to learn more about how we can help you set up a partnership that will get you started on the right path.
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