Five key issues for GP partners to discuss during a partnership split
Lawyer and mediator Paul Bennet provides a checklist of five key issues to discuss during a partnership split
When a GP partnership begins to fall apart it is more often than not due to a personality clash or a failure to meet expectations among the partners themselves. Being a GP is a ‘profession’, not a business venture, and emotions can run high given the common issues.
GP partnerships involved in mediated splits tend to revolve around who is going to leave, when they are going to leave and how they are going to leave.
I once worked on a GP mediation with four partners involved. The founding partner, an older male, had later taken on three younger partners (of both sexes). Feeling he’d guided his younger colleagues over many years and he had offered them a partnership, but from the other partners perspective he had become an overbearing, dominating character whose choice to stay on after retirement age pushed the other partners to breaking point. Investment in the practice was an issue and the direction of the practice was in dispute.
On one side were three partners exhausted by the other’s dominance, and on the other side was a man who felt like the people he had nurtured into partnership were betraying him.
A costly legal split, however, was not necessary. Rather than spending £10,000 plus on legal fees disputing elements of the Partnership Agreement before the Court, a charge of £2,000 plus VAT in total was paid for a mediated split. Allowing the original partner to leave gracefully was key, a retirement date was agreed and he started reducing his working days in increments. A destructive split was avoided, and all parties came out with a satisfactory result. As a mediator working through what matters to the parties and finding common ground is key. For highly personal professions, like GPs, it is a fantastic tool to resolve intractable disputes.
If you are using mediation to dissolve your partnership, the following five-point checklist covers the key topics you must resolve during discussions.
Who owns the property of the practice? If it’s not the current partners, how are the risks managed to ensure continuity of the practice? In the example above the premises were owned by the original partner’s pension scheme, but it was agreed the premises would be leased for another ten years for the sake of the practice.
Except in exceptional circumstances, patients would not be split. The practice has the NHS contract, which is in the name of the partners collectively. In the typical cases we see of one partner breaking off from the practice, the patients would remain with the practice. Of course in mediation the parties can agree alternative solutions, which would be subject to any third party approvals required.
Do you have succession plans and the ability to repay capital on retirement/exclusion? Locums, for instance, are frequently brought in as part of succession planning, with any cost being covered by the remaining practice.
4 Debts and income
Once again, the typical position is that one partner would split off from a practice and any debts and income would remain within that practice. Variations can of course arise under the Partnership Agreement or as part of the mediated outcome bespoke to the doctors involved.
As with the other assets associated with a practice, the staff would remain and would not be split off with a partner. However if a group of partners wanted to split the practice then staff could be transferred subject to proper consultation under employment legislation.
Paul Bennet is a partner at Aaron & Partners, specialists in company and partnership law. He works in in the company’s Shrewsbury office.