DR Solicitors Blog

Should you promote a non-GP into your partnership?

[fa icon="calendar"] Oct 21, 2016 11:14:17 AM / by Daphne Robertson

Daphne Robertson

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The changing nature of running a GP practice, with all its pressures and complexities, means that most GP partnerships now recognise the need and benefit of having skilled managers supporting them.

One area where this is having a noticeable impact is within the structure of GP partnerships themselves. While it is still relatively rare, it is becoming more common for non-GPs– such as nurse practitioners, business managers or practice managers - to be offered partnership.

There are many reasons why a GP partnership may consider going down this route and it can have potentially broad-reaching benefits for a practice. Here, we take a closer look at what those benefits may be, along with the key legal issues that can arise.

 

Key benefits

Motivation & commitment

  • For a manager, the offer of a partnership may be seen as fair reward for their enterprise, commitment, and business acumen
  • Promoting a manager may help you retain a key member of staff
  • It can incentivise and motivate employees as it demonstrates a clear career path

Practice profitability

  • Being the part-owner of a business rather than an employee can have a positive effect on perspective, encouraging a manager to think about the future and long-term viability of the practice
  • Partnership provides a direct link between income and the overall financial success of the business, which can incentivize a manager partner to help maximize profitability and find new sources of income for the practice

 Stronger partnership

  • It can bring greater stability to a partnership, as the more partners there are, the less likely you are to face the ‘last man standing’ issue
  • It can change the dynamics of a partnership for the better
  • A manager may also introduce equity to the Partnership when he/she joins

 

Legal issues to consider

There are many legal issues that need to be considered before an offer of a partnership is made or accepted. It is also worth noting that a non-GP partner cannot be left as the ‘last man standing’, as they cannot (in most circumstances) hold the medical contract. So generally speaking you will always need at least one GP or other appropriate clinician to be part of the partnership.

Here’s what else you need to think about:


Personal liability:  A full non-GP partner would assume unlimited liability for the debts and liabilities of the practice because he or she would be an owner of the business.

Practice insurance: Whilst a GP partner currently secures 100% indemnity insurance in respect of clinical claims, a non-GP partner would risk being sued if their responsibilities are not adequately documented.  Therefore, the practice needs to ensure it is adequately insured. 

Employment rights: These do not apply to profit-sharing partners because
they are independent contractors, not employees. Partners are not automatically eligible for authorised leave such as parental, maternity and paternity leave, or for the remedies for redundancy or unfair/constructive dismissal unless the partnership deed says so.  An employee promoted to partnership would lose these rights.

Tax: As a profit-sharing partner, a non-GP partner would be classed as self-employed so would have responsibility for paying their own tax and national insurance contributions under Schedule D.

Pension: A non-GP partner can be part of the NHS pension scheme, and will join as whole time officers. Employees should take specialist IFO advice to ensure they understand this point before committing to the change in status.

Surgery premises: Will you require the manager to buy in? If so, contact your mortgage provider and any landlord (if applicable) to get their consent and check on any additional requirements.  You will want proof of the person’s financial standing before they buy in.

Partnership deed: This would need to be amended to include the non-GP partner.  The obligations clauses should ring-fence their exposure to non-clinical issues and responsibilities. You may also consider adding an indemnity from the other clinical partners, in respect of all other third party claims.

Areas of management/voting rights: You may consider limiting the manager’s liability to non clinical areas, such as finance, HR, premises management, IM&T, and data management, and potentially to restrict their voting rights to these areas.

 

One alternative, if you decide that a full profit sharing partnership is not going to be right for you, would be a so called “salaried partnership”. This offers a middle ground, whereby the non GP manager will continue to be employed as a staff member, whilst enjoying the status of partnership. They will retain all their employment rights with none of the risks or responsibilities associated with unlimited liability.

As with any major decision regarding your practice, it is always vital that you ensure that all parties involved are fully aware of the legal considerations and other implications before any formal steps are taken.

For more information about GP partnerships or any other issues associated with GP practices, please contact Daphne Robertson on 01483 511555 or email d.robertson@drsolicitors.com

GP Partnership Agreement


Download this article in pdf format

 

Topics: Partnership, Practice Management, Employment

Daphne Robertson

Written by Daphne Robertson

Daphne Robertson is the founder and senior Partner of DR Solicitors. Daphne is widely recognised as one of the country’s leading experts on all aspects of NHS Partnership and Regulatory law, and prides herself on her reputation for an exceptional level of client service.

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