The importance of having a GP partnership agreement

In the ever increasingly complex healthcare landscape where GPs are facing more challenges than ever, preparing or updating a partnership agreement can be an afterthought. The focus for most partners lies on balancing the provision of treatment to patients versus running, what has now become for many GP partners, a business. The establishment of a sound partnership agreement in addition to a good practice manager can help to ease busy GP partners’ workload and provide some clear structure for practices. These agreements serve as the foundation for efficient operations, ensuring that the Practice functions smoothly and the needs of both healthcare providers and patients are met effectively.

One key aspect of a good partnership agreement is the clarity it can bring to what the expected roles and responsibilities of each practitioner within the Practice are. Defined roles can help to streamline workflows, reduce conflicts and allow GPs to focus on the important work: enhancing overall patient care. Clarity is crucial in a busy healthcare environment where collaboration and coordination are vital for delivering comprehensive and effective services. We have worked closely with partners of many practices to better understand partners diaries and commitments which has helped us to produce bespoke drafting that caters for those schedules for each practice we work with.

As practices have to take on some of the characteristics of commercial organisations, financial considerations are another critical facet that should be addressed by a good partnership agreement. The agreement can help to provide a clear and structured framework for revenue sharing, expense distribution and financial planning. This transparency fosters trust among GP partners and helps maintain a healthy financial foundation for the Practice, allowing it distribute profits correctly but also to invest in technology, staff and patient care. We have worked closely with a number of accountants who specialise in helping medical practices which has helped us to better understand a practice’s focus when it comes to financials and produce appropriate drafting.

Moreover, a good partnership agreement will contribute to the long-term stability and succession planning of GP practices. It can outline procedures for the admission of new partners, the retirement of outgoing practitioners, what to do when a GP becomes ill and cannot work and the transfer of ownership. Foreplaning for the future can seem like an unnecessary task but will save cost and time in the long run and secure the Practice’s continued growth. This can be particularly important when it comes to mergers, something we have extensive experience in supporting.

We recently helped a practice we had been working with for a number of years transfer ownership from the estate of the deceased majority share partner to the other minority share partners. Working closely with the Practice Manager, the Estate and the other Partners, the guidance we had previously put in place for the Practice on retirement of outgoing practitioners allowed us to transfer the interest to the estate for the right price whilst also ensuring that the Practice was able to continue operating.

A partnership agreement can also play a pivotal role in risk management. By clearly defining liabilities, what insurance is required and outlining effective dispute resolution mechanisms, a good partnership agreement can help safeguard and guide the Practice and its practitioners when things do not go to plan.

The importance of having a good partnership agreement in place cannot be overstated. However, it is equally important to have a functional agreement that does not need to be continually updated. Often practices have long, unwieldy agreements that have become outdated, over-cater for the Practice’s actual needs or are just generally too long and complex for anyone to understand.

Further guidance and support

If you would like to enquire about updating an existing partnership agreement or preparing a new one then we can help. Our healthcare solicitors have worked with NHS Trusts, GPs and primary care providers, private hospitals and clinics, and those in the care sector, for the last 40 years.

Our lawyers combine their experience in the healthcare sector with their individual expertise in their practice area; this strength in depth means we are best placed to help you and your healthcare organisation face the future with confidence. Our healthcare law solicitors are based in Maidstone and Canterbury and are ready to help with any legal advice you may require so please get in touch today.

This content is correct at time of publication