Times are difficult for medical practitioners. One common problem faced by many is the need to replace retiring GP partners, and the difficulty of recruiting new junior partners – particularly full-time partners.
We are currently advising a number of medical partnerships that are struggling with this issue. Locums are expensive (and highly sought after), and ultimately what many practices need is a partner who can (a) participate in the management of the practice; and (b) (perhaps more importantly) inject some much-needed capital, particularly if the partners own the practice premises and need to pay out a departing partner.
It’s a ‘buyer’s market’, with more partner positions available than candidates. As a result, we see some practices offering extremely favourable terms to new doctors in order to persuade them to sign on as partners.
However, practices should beware going down this route without taking precautions, and this means taking advice from specialist advisors.
If you are considering recruiting a new GP, you should consider the following to protect yourself/your practice:
- Consider taking on a salaried GP rather than a partner. Many practices are offering salaried positions with a view to partnership, as a means of assessing how the GP ‘fits’ into the practice. It is vital that all parties know exactly what is offered, and that the partnership is not tied into offering partnership if things don’t work out.
- Consider offering partnership on a provisional basis. Most practices now offer a 6 month mutual assessment period which is used to gauge whether the new partner is a good fit - not just whether they are a competent GP, but also whether they get on with staff, are liked by patients etc. Usually, either party can terminate the mutual assessment period without fault, on giving one month’s notice. This can be vital because normally (i.e. once a partner is ‘permanent’), a partner can only be asked to leave if they are at fault in some way. It can be useful to have regular partner meetings during this the mutual assessment period, to iron out any issues that may arise, and check that all parties are happy with how the new partner is fitting in. In some circumstances, it may also be useful to extend the mutual assessment period. Most importantly, all of this needs to be agreed in writing, either in an offer letter or the partnership agreement (or ideally, both) so that all parties are clear on where they stand.
- Check your offer letter – make sure it’s properly worded. Don’t just copy a letter used for the last partner you recruited – make sure the letter actually reflects the terms you want to offer this particular partner. If you have a partnership agreement, the offer letter should ideally mirror the terms of the partnership agreement. If you agree to different terms for the new partner (e.g. in relation to capital to be paid in, or steps to parity), the offer letter should clearly state that its terms supersede the partnership agreement, so that it is clear which terms apply to the new partner.
- If you have a partnership agreement, the new partner should adhere to it from Day 1. This might mean having a new partnership agreement drawn up, but more likely the new partner can simply sign a short deed in terms of which they agree to be bound by its terms. Ideally, this should be checked by the lawyer who prepared your partnership agreement to ensure that the new partner is properly bound by your partnership agreement.
- Stick to deadlines – if the new partner is required to sign up to your partnership agreement, set a deadline and stick to it, otherwise you might find yourselves one year down the line having an argument over whether or not the new partner is bound by the terms of your partnership agreement.
- Engage with your specialist accountants and lawyers to ensure what you are proposing makes sense, financially and legally. It can be worth taking the extra time (and expense) for peace of mind. Usually, a bit of earlier advice will be much (much!) cheaper than an expensive court action or arbitration that can follow a partnership dispute.
- Only agree to terms you can live with. Once the terms are in writing, it can be difficult to vary them unless everyone agrees.
- Most importantly, only hire someone you think you can actually work with. We have acted for partnerships who have recruited new partners almost in desperation, being well aware of all of the ‘baggage’ that they came with. Ultimately, you have to work with these people every day and if you (and your staff, and your patients) have problems with them, those problems are unlikely to go away – in fact, they are likely to be exacerbated by working together in close proximity. Sometimes, it might actually be better to struggle on with locums and Health Board support until a more suitable candidate comes along, no matter how unattractive that prospect might seem.
If you have any questions in connection with the matters raised in this article, or to discuss partnership agreements in general, please don’t hesitate to get in touch.
The matter in this publication is based on our current understanding of the law. The information provides only an overview of the law in force at the date hereof and has been produced for general information purposes only. Professional advice should always be sought before taking any action in reliance of the information. Accordingly, Davidson Chalmers LLP does not take any responsibility for losses incurred by any person through acting or failing to act on the basis of anything contained in this publication.