holding hand in a partnership circle

When people form a partnership, there are always issues to work through. We have all heard the saying, “taking a business partner is like taking a marriage partner” and it is not hard to imagine why. Let’s take a look at some of the potential problems before they arise.

Issues that arise

There can many issues to work through in a partnership in a mental health practice. Consider this list of topics to work through:

  • How compatible are our clinical styles; our work styles; our vision for the organization? 
  • What if some partners want to grow and the others don’t?
  • How are we going to deal with caseload inequities? How do we assign cases fairly?
  • Who is going to do the marketing, finances, and administration? 
  • How are we going to determine fair pay for the therapy, management, marketing, and other administration?
  • How will we handle unevenly distributed administrative tasks?
  • What about the therapy hours given up to do administration? How do we compensate for those hours?
  • Do we agree on a path for future staff to become partners? Are new staff to become partners on equal footing with the founding partners?
  • What if, as time goes on, things change? A partner’s willingness to be invest may change due to changes in circumstances such as a death in the family, divorce, disability, etc.
  • What are the monetary implications if one partner desires to leave the practice? Any compensation? How determined?

Responses

None of these questions is easy to unsnarl. Discuss thoroughly before joining forces. In some ways, the challenge of a partnership is about working through these discussions. My advice is to not minimize any partnership issues that do come up. It is unwise to sweep these conversations under the rug. They are the foundation for your work relationship. They start you in a direction that is tough to change.

Many compatibilities make for good partners 

Compatibility is a tricky concept. Certainly, we need to be enough alike to have similar values. Additionally, we need to be different enough to avoid the same weaknesses. What we are looking for are good teammates; people who fit together well.

Most importantly, the interactions within the group must be respectful and healthy. All want harmony in their work relationships. That does not mean there will never be conflict. The skill we are wanting to develop is the ability for your leadership team to solve differences well. Emotional terrorists in my view should not be in a partnership.

Read more on difficult employees here: Addition by subtraction: Types of difficult employees.

Clinical compatibility

There are many different styles of conducting therapy. New ways of doing therapy emerge all the time. A foundation of trust and mutual respect is essential. This begins with each partner’s view of the other’s therapeutic skills and expertise. If partners do not really trust what is happening in the next room, the partnership cannot last long. After all, your partnership as a whole will develop a reputation.

Furthermore, a community gets confused when partners are pulling in different directions. Marketing is difficult enough without the partnership issues making things worse. If you are not familiar with the therapy of a potential partner it might be helpful to exchange audiotapes of a session for each of you to listen to and discuss. If nothing else the exercise will be a bonding experience.

Compatibility in work style

No two people have exactly the same work ethic. Expectations vary on what a job should offer in return for their efforts. So while getting a new organization started takes lots of effort, not everyone approaches it with the same zeal, intensity, or style.

In most cases, this difference will be evident quite early on. It may become the first issue that challenges the partnership relationship. Sometimes there will even be disputes about how often to meet as partners to sort everything out. Some will not want to do much more than seeing clients. That is a sure sign of problems to come down the road.

Others will show a willingness to invest in marketing and administrative tasks. Above all, the ideal partner willingly commits to meeting together to discuss everything and is eager to accomplish the tasks that are required, even those tasks that are a stretch.

One of the early tasks in any partnership is the assigning of administrative tasks. While not all will be equally good at the assigned tasks, the effort and willingness to contribute is what is most important. Skills can be learned, but a lack of effort is difficult to overcome. 

Compatible visions for the business 

Potential partners often have different reasons for wanting to form a partnership—and these may not be immediately obvious. Before forming a partnership, most have had experiences in other organizations. Those earlier experiences provide positive and negative examples of practice management issues to emulate or avoid.

It is important that potential partners read some of the same books. I have listed some of my favorite business books on this page: Resources.

And Mission?

I would suggest writing out a mission statement. Have each partner write out what he or she thinks the management structure ought to be. I have written about the importance of the organizational mission in these posts:

How large? 

Once the practice is underway, partnership differences over how large to become are hard to fix. And since growing takes enormous energy, one cannot do it alone. Growth is impossible if there is not a critical mass of those willing to put the time and energy into growing the practice.

Two, Three, or More Partners

The first and most fundamental characteristic that shapes a partnership is the number of partners. It turns out that a two-person partnership is quite different than a three-person partnership. And these are quite different from practices where all the clinicians are partners. This really has to do with the nature of dyads, triads, and larger systems. 

Systems theory

From models of family systems theory, we know that dyads are inherently more stable than triads. Under stress, triads often degrade or regress into triangles, the worst of partnership issue. The two-against-one pattern is familiar to all who have witnessed junior high students in action.

More primitive patterns of relating emerge when humans are stressed. This pattern holds true when a business partnership is stressed as well. All tend to regress to more primitive patterns of relating. When three partners are stressed, it is common that a triangle emerges. 

Examples of triads that work

Note that this is not always true. I know of a couple of three-partner practice that seems to work quite well. They have divided up responsibilities in a way that all make a contribution but each has a fair amount of autonomy.

In one case, the partnership is divided up geographically with one partner managing each office site. And in another partnership, they divide up responsibilities by task. One partner does the finances and technology, a second spends most of his time managing one of the remote sites. A third does lots of supervision and also works on utilizing research findings for clinical application and training others to use the information.

What will be interesting to observe is what will happen as new non-founding partners are added to the mix or one partner wants to leave before the others do. They have not yet gotten to that point in their history.

Paths to partnership

One of the frequent features of partnership is the ability for those who join the practice at a later time to have a path to eventually becoming a partner. And the criteria for partnership can vary enormously. You will want some legal help with the language you use to define these criteria. Failure to set this up correctly with certainly lead to partnership issues. Let’s look at some possibilities for the criteria for partnership.

Years of service

Most consider some number of years as the minimum requirement to qualify. I have heard of tenures as short as two or three years, but more typical is five years. The goal is to give potential and existing partners plenty of time to get to know each other and to see each other in action.

Productivity benchmarks

Instead of years of service, some use the number of clinical hours providing service to determine when one is eligible. This is to acknowledge that some may work part-time along the way. So for example, if one is looking for a benchmark equivalent to five years of service, one might begin by assuming 25 hours per week x 48 weeks = 1200 hours per year x 5 years = 6000 hours of therapy to be eligible to become a partner.

Economic benchmarks

Another approach is to use some economic buy-in. Some practices require that addition to some term of service or productivity benchmark, the a new partner pay a sum into the practice. In essence, this is a payment for the purchase of stock in the company.

This criterion is especially used when partners have a payout upon leaving the practice. The exact amount to be paid to join or leave the practice must be carefully determined by contract in order for all to know the expectations.

Summary

Each of these is a way to say that in order to be eligible, candidates must “pay their dues,” be well known by the existing partners and have contributed enough to the organization to warrant consideration for becoming a partner.

What happens once qualified?

Once a candidate has met the agreed upon the criteria, the most usual policy is for the existing partners to vote on the promotion. The partners may have made a significant mistake if this is the first time they have had a good hard look at the candidate’s suitability as a partner.

Often it is the less quantifiable qualities that are what this vote is really about. Additionally, it is possible that partners might be comfortable with a colleague as an employee but not as a partner because of those more subjective qualities. 

To prevent misunderstanding, honest feedback about how a potential partner is doing must be a regular part of the conversation. Practices that have this structure, will usually have an annual review where feedback is honestly given to the potential partner. Without direct feedback, the candidate will expect that the partners’ vote to be a mere formality. In the absence of information to the contrary, employees usually assume that they are doing well. 

If the partners have not voiced their issues at a much earlier time, even a delay will be met with shock and anger. And a negative vote would likely mean a parting of ways at the disappointment of being turned down as partner. 

When everyone becomes a partner

Where all the clinicians become partners, we can predict certain things. Consider the following quote from an early developmental psychologist, Dr. Heinz Werner in 1957:

“Wherever development occurs it proceeds from a state of relative globality and lack of differentiation to a state of differentiation, articulation, and hierarchic integration.”

Werner, H. (1957). The concept of development from a comparative and organismic point of view. (In D. B. Harris (ed.), The concept of development. University of Minnesota Press, Pp 125-148.

Werner is saying that things that develop over time, including organizations and all other systems, begin as a big glob of something, and as they grow they differentiate into parts. The parts become separate and distinct entities or subsystems organized to accomplish certain functions more efficiently.

Consequently, all growing systems develop organization and hierarchy among those subsystems in order to accomplish certain ends more efficiently. He saw these principles as self-evident and universally true and believed that they applied to all development wherever it was found.

Beyond theory: An example

In large accounting or law firms with many partners, different categories of partners emerge. There may be Junior Partners and Senior Partners. A separate class of partners may emerge called Managing Partners. They are in charge of managing the decisions that the partnership needs to make. There may be a Board of Directors or a Steering Committee. And even beyond that, there is might be a Chief Managing Partner who operates as a Chief Executive Officer for the organization. Notice the differentiation, articulation, and hierarchic integration that Weiner predicted. And these structures help everyone know their role and how to manage any partnership issues.

Large partnerships might do well to consider how to borrow some of the organizational structures that larger partnerships adopt as a way of dealing with the problem of efficiency in decision making and clarity of roles. Without the administrators or managing partners, an organization may suffer from meeting fatigue. It may be important to develop a mechanism for electing, appointing, and/or managing a single Chief Managing Partner as well.

In conclusion

I have seen successful partnerships. In the ones that thrive, they have worked through the questions and issues beforehand. And they have defined roles and duties carefully and in a way that they are comfortable with.

On the other hand, I have seen such serious issues that the partnership dissolved. The incompatibilities were not able to be fixed or repaired.

Here I have written about the wrong motivation for entry into a partnership: The place of fear in decision about practice.

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