How to... draw up a practice contract
The mere act of working together as a partnership means you are in a legal partnership. If problems arise, you cannot claim there are no legal obligations because there is no written contract.
In the absence of a formal partnership agreement the Partnership Act of 1890 applies. This is unlikely to be well-suited to the partnership problems of the 21st century, so how should you draw up a good practice contract?
1) Find a solicitor with experience in medical contracts. The BMA gives advice. The solicitor will also need to liaise with the practice accountant.
2) Forget your current practice and imagine you are in the practice from hell. Think through how you can protect yourself. Imagine, for example, you take on a new partner who turns out to be a disaster.
3) Decide what you want in the contract and make a list before the first meeting with the solicitor.
4) The practice property is often the largest single asset and valuation must be carefully laid down. Phrases such as 'at current valuation' are meaningless; specify vacant possession. And is the property valued as medical premises? If not, it could be worth more if it is on a valuable plot or less if it needs substantial alterations for any other use. Include a clause suggesting a third valuer in the event of a dispute.
5) In the past, contracts had clauses insisting that an outgoing partner did not register patients from the practice or did not practise within a laid-down radius. These clauses are not legally enforceable and even if they were, why are they needed? As patients are now registered with a practice and not an individual doctor, a partner cannot take his or her registered list. If a few patients choose to follow a GP that is their right.
6) Illness, paternity and maternity clauses need to be included. How long can a partner be off work before they should pay for the locum and how long before they have to resign as a partner?
7) Although it is reasonable to allow partners to keep income generated in their own time, should there be a limit? Should you allow a partner with financial worries to work all night and then work all day in the practice?
8) In a partnership, one partner with financial problems will affect every other partner. Financial protection for all needs to be in the contract.
9) Although paying a solicitor to write a contract may be expensive, it is a tax-deductible expense. It can also save money if it is ever needed. The ideal contract sits in a drawer and is never required. Like a good insurance policy, it is vital if a crisis should arise.
Dr Peter Moore is a GP in Torquay