Building a Successful Group Practice: The Power of Partnership and Protection
Your private practice is thriving—you’re fully booked and have a waitlist. You start to imagine expanding, bringing on an associate, or renting an extra office. The idea of passive income is enticing, but there’s one thing holding you back: uncertainty.
Should You Go It Alone or Find a Business Partner?
Taking the leap into a group practice can be daunting. If you don’t see yourself as a “business person,” the idea of managing others alone may feel overwhelming. It’s natural to consider bringing in a partner—someone to share responsibilities, costs, and liabilities.
When I first envisioned my group practice, I knew I didn’t want to do it alone. I wanted support, both emotionally and strategically. Partnering with a colleague made the transition smoother and helped me stay on course through the challenges of building something new.
Having a business partner can be incredibly rewarding, but it also comes with challenges. That’s why it’s essential to have a solid foundation in place before making it official.
The Importance of a Shareholders Agreement
Think of a shareholders agreement as the prenuptial agreement of business partnerships. While you and your partner(s) may be aligned now, it’s crucial to plan for the unexpected:
What happens if one of you becomes incapacitated, moves away, or decides to leave the business?
How will you handle disputes?
What protections are in place if your partner wants to start another practice in the same city?
A well-structured agreement lays out expectations, safeguards the business, and ensures that you and your partner(s) are on the same page.
Key Questions to Address in Your Agreement
Before moving forward, consider discussing these essential topics:
✅ Vision & Decision Making – Are your goals aligned? How will you resolve disagreements?
✅ Illness & Disability – What happens if one partner is unable to work?
✅ Non-Compete & Non-Solicitation – Can your partner open a competing practice nearby? Can they recruit your associates or clients if they leave?
✅ Confidentiality – How will you protect your business systems, client information, and proprietary methods?
✅ Dissolution & Disputes – If conflicts arise, how will they be handled? Will you include a shot-gun clause for buyouts?
✅ Breach of Obligations – What steps will you take if one partner fails to meet their responsibilities?
✅ Valuation & Buyout Terms – How will you determine the fair market value of your business if the partnership dissolves?
✅ Ownership & Death – If a partner passes away, who inherits their shares, and how will it impact the business?
✅ Financial Contributions & Compensation – Who is investing what? Will one partner contribute more work and be compensated accordingly?
Lay the Groundwork for a Strong Partnership
These are challenging but necessary discussions to have early on. While the excitement of starting a group practice can make it easy to overlook potential pitfalls, planning ahead will protect both your business and your relationships.
Consulting a lawyer who specializes in business partnerships can help ensure your agreement is comprehensive and legally sound.
A well-thought-out shareholders agreement doesn’t just prepare for worst-case scenarios—it also fosters transparency, trust, and a clear structure that can set the stage for a successful, long-term partnership.
If you’re considering starting a group practice with a partner, take the time to get these details right. Your future self—and your business—will thank you!
