An agreement built to suit your
However harmonious your practice you must have a partnership agreement, and it needs to be drawn up by people who know their business, says
Dr Peter Moore
Even the most successful practices can run into trouble. People change and there may be illness or a financial crisis. So make sure you have a well drawn-up practice contract.
Even without a written contract, the act of working together as a partnership makes the business a legal partnership. You cannot ignore the rules by claiming yours is not really a partnership because there is no legally binding contract. So why not get a proper contract in the first place?
In the absence of a contract, partners have legal obligations under the Partnership Act of 1890 not an Act which mentions computers or the practice website. Do you want to negotiate your own agreement or rely on a Victorian law?
The first step in devising a sound practice contract is to approach a solicitor who understands general practice. Solicitors, like doctors, have their own specialties. Word-of-mouth recommendation is a good idea.
Most firms with expertise in medical matters have off-the-shelf practice agreements that can be tailored to the circumstances of your practice. The BMA also produces a model agreement and can give advice.
Rather than just asking for an agreement, think through what your practice needs. Looking at a practice agreement gives a history of the practice like a geologist looking at rock layers. One practice agreement may have only a few lines on buying or selling premises but pages on the health of partners. Another may skip through health and retirement issues but have pages on valuation of property. We can guess the dispute when the last partner retired.
Before meeting the solicitor, try to imagine you are a partner in the practice from hell. All your partners are after your income and your share of the practice but refuse to do any work. This will concentrate you mind and help you cover every eventuality.
Doctors fall out over workload and money. Although agreements will insist on 'working diligently', this is difficult to prove. Even if the whole practice, and probably the patients, know that Dr X is bone-idle, statistics will show that he is seeing patients.
Conscientiousness is subjective. So try to ensure the contract is phrased in a way that eliminates ambiguity as far as possible.
Buying and selling premises
Buying and selling premises is an important area to cover in the practice contract. For partners who buy in, the investment is a crucial part of their retirement plans.
For new GPs the size of the loans can be frightening. Phrases such as 'current market value' are meaningless. The existing partnership could claim to be sitting tenants to cut the market value. And, if the building is on a prime site, the value could be inflated if it was pulled down for a block of flats.
Should the income from the cost-rent or notional rent be taken into account when valuing the cost of buying in? All these issues need to be discussed with a solicitor and thought through before finalising the agreement.
Illness, paternity and maternity clauses are important. Some funding may be available from the NHS for maternity or illness and it is sensible to understand the rules before deciding details. And rules can change.
Other important areas the contract must cover will be on the draft version. It may be tedious looking through the draft contract but it is important. Anything you do not understand, check with your solicitor.
A good, professional contract, tailormade for the practice can be expensive £3,000 or thereabouts but the cost is shared and tax-deductible. The hope is that it is never needed, but it is important to have it there. My car has airbags which I hope are never needed, but it is important to have them there.
Peter Moore is a GP in Torquay, Devon
Tips for drawing up a contract
· Hire a solicitor who understands general practice
· Peruse draft contracts carefully check anything you don't understand
· Think about your practice's specific needs/idiosyncrasies
· Imagine everything that could go wrong in
· Purchase and sale of premises
· Paternity leave
· Maternity leave
· Outside work