ADVISORY e-ALERT     October 29, 2010
Advisory Law Group, a Professional Corporation



"I deserve to be a partner."

Strong words when they're echoing in your head as you sit across the room glancing at one of your group's partners, who has just blurted it out to defend his status.  Stronger still if they've shot across the room from a subcontract physician's mouth to your partner ears. 

For decades, the late comedian George Carlin delighted audiences with a routine, the 7 words you can't say on television.  True, "partner" was not one of them.  But then again, Carlin was a solo act; he didn't want a partner.  We'll never know for sure, but I think it was because partnership was a concept the he found too vile to joke about. 

What is partnership or, for incorporated groups, shareholder status all about?  (In this article, I'll refer to either concept of ownership as "partnership.")  Who should be offered partnership?  Why?

And, looking at the issue from the other perspective, that of a non-owner physician, what does becoming a partner mean?  Depending on the answer, should you want to become one?

There is No Rule, But You've Got to Have One

There is no general rule on who should be granted partnership.  That said, your group has to have one - one of its own.  And, that rule has to be adopted in the context of your group, because if it's not, your group will cease to be the entity it was intended to be.

Of course, this means that your group has to know what it intends to be and what partnership means in that context.  This is not meant to be a tremendously deep existential or even epistemological discussion.  Rather, just how integrated and organized do you intend your group to be? 

I have a tool to describe the continuum of group structure that I call The Four Circles™. 

The Four Circles

Reactive Groups™ have an approach that can be described more as a collection of individuals than a true group.  They are marriages of convenience to further each physician's personal goals.

Groups in Equilibrium™, too, exist primarily to further each of the group's individual physician's goals although there is an understanding that they must band together as a group in order to compete - in essence, it is a "club" with members sharing at least one common goal:  keeping others out.

The Focused Group™ represents a dramatic shift forward in the group developmental continuum.  It exists to further the group's, and not the individuals', immediate and midterm goals although partners are also free to pursue their independent goals outside of the group. 

Lastly, a Strategic Group™ exists to further the group's goals on all levels.  Its partners understand that the group's short, medium and long-range goals outweigh their individual interests but, at the same time, understand that the tremendous value created upon accomplishing those goals maximizes their own self interests.

In my work with my most success oriented clients, the goal is to help the group move toward the Strategic Group level and then to continuously hone its performance.  Other groups may, for whatever reason, prefer to remain at a lower structural level.

Your group's rules for partnership must conform to its desired structural level. 

For instance, if your group wishes to operate at the Reactive or Equilibrium level there is little to no downside for the group in admitting additional partners. 

At these lower levels, partnership itself has less meaning, both for the group and for the physicians "elevated" to partnership.  From the perspective of governance, the common swollen rank of partners in these groups often goes hand in hand with fully participatory management -- the often paralyzing situation in which there are too many partners, each of whom has a vote in respect of management.

For the individual physician in that context, becoming a partner may or may not have significant meaning.  If nearly everyone is a partner, what benefit does it bring to you?  Clearly, the determent is some degree of shared liability, even in the corporate practice model.

On the other hand, if yours is a Focused or Strategic Group, only those individuals who are willing and able to advance the group's, and not simply their own, interests as the first priority should be considered for partnership and partnership ranks should grow slowly to allow full integration of the previously admitted partners into the entity.

For individual physicians in Focused and Strategic level groups, the limited nature of partnership slots together with the group's more developed business structure can provide a value independent of your own practice activities. 

To learn more about entity structure and how your group can avoid the dangers confronting commoditized practices, contact Mark F. Weiss now. 







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Or, you're the new leader of an existing group with complex practice and business operations -- you need to understand how to master the group's organizational, operational and leadership issues -- and you need to be brought up to speed immediately.
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