When physicians fight: Tips to deal with a dispute in a private practice.

Physicians who run a private practice must balance two important professions: the practice of medicine and the running of a business. In previous generations this often involved a single physician starting their own practice. Today, it is more common for physicians to join together to form a practice.

Tip #1: Know what can lead to a dispute

Some of the more common causes of disputes amongst physicians involve the valuation of the practice, whether or not to consider a merger or acquisition deal, letting others become partners, and the transition of partners into or out of the group.

Tip #2: Know how the practice works

Although referred to as partners, the practice is generally not a partnership in the legal sense. Physicians are unlikely to structure their private practices as a partnership because other business entities will better serve their needs. As such it will not work as a partnership in the event of a dispute even though the term “partner” is still used to signify a physician’s rise in ranks on the business side of the operation.

Instead, the practice is more likely to function as a limited liability corporation (LLCs) or professional corporation.

Tip #3: Know the resolution options

The first step in the event of a dispute is often to look to by-laws, operating agreements, partnership agreement documents or a shareholders’ agreement. Check the provisions in these documents to see if there is an area that addresses the issue.

If unable to reach a resolution on your own, a form of alternative dispute resolution such as arbitration or mediation may be an option. These both generally involve a neutral third party that helps guide the disputing parties towards a manageable resolution.

If mediation or arbitration are not fruitful, litigation may be necessary.

Is there anything else we should know?

State law plays an important role in these disputes. State law guides many aspects of business ownership, particularly within the healthcare marketplace. As such it is important to get an attorney who is familiar with the role of state law in your area to provide guidance to better ensure a workable resolution in the event of a legal dispute.

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