As GPs are having to work in closer alliance with other practices or organisations, getting the basics in place for effective collaboration is a must. Lawyers Edwina Farrell and Ian Pace advise on how GPs can do this
Historically, GP practices have tended to be owner-managed businesses.
In recent years we have seen greater collaboration between practices and other service providers (for example, with the formation of primary care networks and federations), and this is expected to only increase in the future.
GP partners must, more so than ever before, be prepared for wider collaboration to be able to succeed in this changing environment. Ultimately, any successful collaboration starts with getting your own house in order.
In this article, which is the first of a two-part series, we answer some common questions about collaboration within practices. Done well, this delivers a foundation that will help make any future practice-to-practice partnerships a success.
What are the first things you need to consider before joining a partnership?
Partnerships are the traditional delivery model for general practice and, by their very nature, require collaboration and involve close personal relationships.
But this introduces risk that can sometimes expose individuals to the negative impact of others’ actions. Before entering into any partnership, it’s essential to conduct thorough due diligence to identify and understand any past, current or future issues that could become personal liabilities for you as a partner within the business in question.
Some basic areas to consider include:
Staffing issues – Prospective partners should assess whether the contracts of employment and policies are legally compliant and fit for purpose, and if there have been, or are currently, any live grievances from staff or employment tribunal proceedings against the partnership or any of the partners.
Outstanding liabilities – New partners entering a partnership should be aware of any live, pending or threats of claims or regulatory action from outside the practices against the partnership or any of its partners. This might include claims from patients, or any enforcement action from regulators, such as the CQC.
The partnership relationship is based on mutual trust and confidence, so don’t be afraid to ask questions about these sorts of issues. Not doing so can mean problems remain undisclosed, which will likely threaten successful collaborative working inside the practice
Property issues – Prospective partners should review the basis of occupation of the surgery, for example, whether it’s freehold or leasehold, and whether there is the requirement to buy a stake in the practice if it is owned by the partnership.
If buying in to the premises is a requirement of any new partner – or an option the parties would like to explore – it will be important to first understand any valuation of the property presented, and in many cases whether borrowing on acceptable terms is available.
If the property is rented, new partners often worry about taking on a leasehold liability while outgoing partners and partners who may be due to retire in the relative short term will want to ensure that there are enough partners holding the leasehold interest to satisfy the landlord’s requirements.
It is likely that the landlord’s consent will be required for the transfer of the interest for both incoming, and in some cases outgoing, partners’ interests so this should be dealt with in good time.
Historically, outgoing partners often think that having retired from the partnership they are automatically removed from the leasehold title, but this is not the case. As a result, a partner who does not update the title when he or she leaves remains liable to the landlord for the lease agreement and this can potentially introduce other issues for the remaining partners. This includes the practice being in breach of its lease for not dealing with the title changes, which could lead to the loss of the lease and potentially rent reimbursement and loss of contract.
It is important that all partners, existing and prospective, who are currently on or thinking about being added to the lease understand its obligations; satisfy themselves that there are no outstanding breaches that could cause unexpected and unwanted surprises; and that the title information has been brought up to date.
Prospective partners should also understand the state of the property (specifically whether there are any outstanding maintenance issues), and what the partnership’s obligations for maintenance and repair are – all of which will have cost implications, so you need to know what is in store.
Financial due diligence – This should always be conducted on the practice’s accounts. Usually there is an opportunity to do this, and if this is not offered you should insist on it. If the practice resists, consider why that might be and whether it is worth taking on the risk.
Do I need a partnership agreement?
The short answer is ‘Yes’. The best advice is that you should have one.
A partnership agreement establishes a clear framework for the running of the practice, and the relationship between partners.
Without a written agreement the partnership will be a ‘partnership at will’ and can be dissolved at any time by any partner serving an immediate notice of dissolution upon the other partners. This could result in a forced sale of the partnership’s assets, a complex and protracted legal dispute and potentially even the loss of an NHS contract.
The contents of agreements can vary significantly, but could, for example, stipulate the commencement date and duration of the partnership, the assets (e.g. the property, equipment, surgery, fixtures and fittings), the valuation of partnership assets, capital contributions, holiday and leave entitlements, retirement restrictions and obligations of outgoing partners.
Always seek professional advice in reviewing any existing arrangements or preparing any new documentation.
If a partnership has an agreement already in place, this should be regularly reviewed to ensure the provisions reflect the current regulatory framework, and the current working conditions between partners. Partners may be able to update it without drawing up a completely new document. Instead, they could use a shorter supplemental agreement, which changes those provisions of the old agreement that need to be updated but leaves the rest intact. This approach can be quicker, and less expensive.
Be aware that ‘partnerships at will’ can arise between the existing partners and an incoming partner if the new partner joins before signing a formal agreement. Existing partners should therefore ensure the new partner and all existing partners sign a new agreement or a variation of the existing one before a new partner starts work.
How many hours should I agree to be working for the practice?
As in every organisation, sadly when left to their own devices not everyone pulls their weight in terms of responsibilities. Stipulating requirements (perhaps in terms of what needs to be covered on a weekly basis) in a partnership agreement will establish clear expectations and obligations and make managing any issues much easier.
That said, there isn’t a set amount of time that a GP partner should work, and much will be down to the needs of the business.
Who has responsibility for staff?
Practice staffing is a responsibility that rests with partners, and one that can cause disagreements and issues.
As an employer, partners have a duty to ensure they have the right policies and processes in place for staff. Just as new partners joining the partnership should look to see that these are in place, current partners should ensure that all employment policies and procedures and contracts of employment are legally compliant and fit for purpose.
Ultimately, having robust processes and procedures in place helps minimise the risk of grievances or claims being brought against a practice, and helps manage any issues if they arise, swiftly and consistently.
As part of the partnership agreement, partners should also spend time establishing how they themselves are expected to behave, and what responsibilities and scope they each have for hiring and firing staff. The latter is something that we commonly see causing friction between partners.
Failing to act correctly and promptly can have significant consequences for both the practice and the individual partners. The partnership will be collectively liable for compensation if a claim against the practice is upheld by an employment tribunal and would be payable for from the partnership’s funds.
Claims for discrimination carry significant financial exposure and can be brought against partners individually, as well as the partnership collectively. Partners may, therefore, be held to be personally liable for compensation if allegations of discrimination are upheld against them. Aside from the potential financial exposure, employment tribunal claims may result in reputational damage for both the practice, and any individuals involved.
Establishing a good foundation
As partners, you are already collaborating with each other.
Establishing good working practices means you’ll be approaching any opportunities for even broader collaboration – such as with other practices – from the right place.
In a separate article, we will cover some of the principles for good third-party partnerships, and key pitfalls to watch out for.
Edwina Farrell is head of the primary care team at national law firm Weightmans. She advises GP practices, partners, local medical committees and those who work with them. Ian Pace is an employment lawyer, specialising in advising clients in the primary care sector.