It is common knowledge, even though claims by many consulting companies differ, associateships to successful partnerships fail more often than they succeed. The cost is tremendous in terms of time, money and well-being for everyone involved. Both parties suffer. The practice suffers. Staff suffers. And, patients suffer.

 

Nevertheless, associateship to partnership and/or full practice purchase is heavily promoted by consultants. Unfortunately their claims of success and easy money are untested and results of these transactions are unexamined. There is no regulatory compliance for the agents who manage these transactions, zero, none. Reminds me of what happened recently on Wall Street. Bernie Madoff anyone?

 

Without oversight or measurements of success, consultants and attorneys are making a fortune by claiming it is the best way to optimize your assets, a simple and easy pathway to wealth, a smart exit strategy, and way to work less and make more. Does it sound too good to be true? Well in my view it is.

 

A while back, I made an offer to the ADA to run a national survey (at my own expense) that would measure the success rate of these associateship to full partnership or limited associateships leading to total immediate purchase of the practice. Given my position in the industry, I have very little political muscle. Deep-pocketed major consultancies, that now make millions from these deals, along with the ADA's timidity to stir the pot, have thwarted my intention. I have an online survey ready to go but no way to roll it out.

 

I strongly recommend that if you are considering this avenue of associateship to either partnership or full practice purchase, before you hire a consultant or a practice broker, you read my book on partnerships, Partnerships: Why They Succeed and Why They Fail (Amazon. com). It presents what works and what doesn't work in putting these relationships together. It's the bestselling book on this subject for a reason.

 

My discovery is there is a third step in this process, making it a three step process. It's actually the first step and if done well, it literally ensures success of the partnership or purchase. What is this first step? It's sponsorship.

 

What I mean by sponsorship is the senior dentist directly contacts residents or dental students himself or herself, who have a strong interest in practicing in their area. This is done two years ahead of when the associateship is placed in an office. After several preliminary interviews and interactions, the senior dentist takes a student or two under her or his wings and generates a relationship as a mentor.

 

As a mentor, the dentist invites them into the practice to observe or work. They stay in communication with the student to assist them in navigating the issues and concerns that invariably arise in the student's life and training. They emotionally support and nurture these individuals. They become a true sponsor of these students.

 

My success using sponsorship as the first step in the associateship to partnership process is 100%. We've only done a dozen in the last five years, but they have all worked. My experience in the field is that generally when the deal is totally initiated and then transacted by a consultant or a broker, the success rate is less than 20%. Let's see 5 to 1 odds?

 

I won't go into details about what occurs in a sponsorship or how a sponsor mentors a student. It varies for each situation - type of practice, location, history of practice, market, etc. But we always work with the two parties on the front end to set up clear lines of communication, set up structures for fulfillment, and work out commitments and conditions for a successful business relationship. Most of this is in my book on Partnerships.

 

My proof is my success. When a student is effectively sponsored, when they eventually step into the associate to partnership role, it absolutely works. Given the investment of time and money in associateship, lawyers, patients, impact on income, training, advising, etc. with a cost of around $100,000 a year invested in the first two years into the process, effective sponsorship dramatically reduces the chance of failure.

 

The next time a consultant or broker talks to you about how sweet these deals are, ask him or her to show you their statistics over the last five years. How many remained successful? How many failed? You should get phone numbers and call! If it's too good to be true, it's too good to be true.