Buy-Ins and Partnerships

Where the doctors are closer in age, they may contemplate a practice buy-in (partnership), and the two or more doctors will practice together for many years.  The partnership documents will need to address certain key issues, including how the doctors will compensate themselves.  Will compensation be based on their production?  Will it be based on their percentage ownership in the practice?  Or, will it be a hybrid of both?  Also, how will the practice be managed?  Often, all business decisions will be agreed upon unanimously.  Sometimes, Dr. Senior wants the right to retain more control during the early years.  Also, what are the buy-out terms if one of the partners retires or, heaven forbid, dies or gets disabled?  Agreeing on these big issue up front is crucial for maintaining healthy relationships between the parties and ensuring the practice’s continuity.