Londonwide LMCs

Whether you have been offered the opportunity of joining a practice as a partner; or it is something that you are factoring into your future, there are several things that you must consider/undertake before agreeing.

Whilst there will be many considerations and obligations to review, these should not automatically be regarded as preventing you from becoming a partner; and this guide is designed to take you through them in a systematic way.

At first glance, the content may look daunting as it details the many checks that should be undertaken, and documents read. It is not meant, in any way, to be dissuasive of you taking up a partnership role, rather to provide bite-sized pieces of information to assist you in deciding whether a partnership is right for you.

Thorough groundwork prior to agreeing to a partnership will help you make an informed decision. If at the end of reading this document, you still have questions then please contact our GP Support team at: gpsupport@lmc.org.uk.

Londonwide LMCs also our Aspiring to partnership programme, which can be taken as a full course or individual modules. Details of the course from when it was first launched are here. If you would like to know more about it, including when it will next run, please contact Kayleigh Taylor, Project Manager on: kayleigh.taylor@lmc.org.uk.

General considerations

Who can become a partner?

Historically partners were primarily GPs, with the occasional practice nurse joining the partnership. In recent years there has been a rise in non-clinical partners with a focus on practice and business managers. Whilst these individuals may be partners in the practice and sometimes are joint signatories with doctors on the practice’s NHS contract, they are not able to hold this contract in their own right

Ethos, values & personalities

One of the areas that it is key to consider (but is often forgotten) is the ethos and values of the existing provider(s) and thus of the practice. These are people that you could be working with for many years, and therefore, your first consideration should be to decide if you share the same values. Whilst these may not always be 100%, they should be closely aligned so that you will feel comfortable working alongside the existing partners and contributing to the direction of the practice in a long-term leadership position.
Personalities are also a key factor to reflect on. Working with like-minded people is crucial to a stable practice. No, you are not going to agree all of the time, but you should be able to respect the differences when they occur.

One of the best ways to gauge how the practice’s values align to your own is to undertake locum or salaried work at the practice, if this is possible.
Also consider, and/or discuss with the existing provider(s), who will be there to support you in your transition from employee/locum to partner. Your learning curve will be steep particularly in the first 6 – 12 months, and so it is important to have clarity on who will be able to provide you with support and guidance, especially with the business and financial aspects of partnership. Also discuss undertaking external courses to expand your knowledge.

Commitment

Becoming a partner is one of the most important career decisions you will take. It should always be regarded as a long-term commitment and therefore, it is important that you fully understand the responsibilities, obligations, and advantages that come with it and encompass the many areas that make up your practice.

Things change dramatically when you become a partner. To begin with you will become a signatory to the practice’s GMS/PMS/APMS contract, which makes you equally responsible with the other partners for the delivery of all contracted services; (this is sometimes referred to as having ‘joint and several’ liability).

Your workload will no longer be primarily patient centred. Joining a practice as a partner also means that you are now jointly running a business with all the relevant responsibilities such as staff, premises, and profitability.

This invariably brings longer working days, as practice matters are often dealt with after you have finished your clinical sessions. Therefore, do not underestimate the additional time commitment becoming a partner will bring with it.

Ask the existing partners how long their working week is and what percentage is dedicated to practice/partnership matters. Find out when their partners’ meetings are held, as this may be at lunchtimes or weekends, as opposed to late evenings in a working week.

Most practices will have a period of mutual assessment written into their partnership agreement, which gives both sides the opportunity to decide whether the new partnership is working for them. Check whether this is included when you review the practice’s current partnership agreement.

Employment rights

Once you become a partner you have none of the usual employment rights such as paid annual leave, sick pay, maternity/paternity leave etc. Therefore, it is important that your rights to these are clearly covered in the partnership agreement.

You should also take some time to discuss in full the financial advantages and disadvantages of becoming a partner with your accountant. It is important to remember that income as a partner can fall in addition to increase, whilst as a locum or salaried doctor, you have a fixed income for the sessions that you work.

Also, as a salaried GP you are entitled to paid study leave; therefore, you should check the provisions of the partnership agreement to see what, if any, are made for partners’ continuing professional development and who pays for training courses.

Additionally, it is worth asking what training the current partners feel would be useful for you to undertake to help you in your new role; and what, if any, budget the practice has put aside to this or whether you would be expected to pay for the training yourself.

Due diligence

This should always be undertaken even if it is a family practice, or one known to you, that you are considering joining as a partner. Remember you are joining a business that you will then part-own; therefore, it is important to be reassured that your investment (both financial and time) will be secure.

Due Diligence is quite simply getting information from a practice so that you can build up a picture of it. This is mostly done as a review of documents such as accounts, the partnership agreement, staff contracts, CQC inspection reports etc., that will give you information about a practice, its profitability and viability.

In addition to reviewing key documents, you may also wish to speak with staff and PPG/PCN members to gain an understanding of the practice’s ethos.
Due Diligence is not something that should be rushed, if done thoroughly it could take two or three months. The information you gain from it will help inform one of the most important career choices that you will make. When undertaking it, factor in that you may require professional assistance (e.g., legal, financial, HR) and the cost of these. As a minimum, you should consider undertaking the following, which are not listed in any order of importance, as part of your due diligence:

CQC

Assessments

The CQC website gives information on practice inspection reports (recent and historic) and compliance information, such as registration details. Reviewing these reports will help you understand the practice’s strengths and weaknesses and whether it learns from, and successfully corrects, concerns raised by the CQC inspectors.

Registration

Although not strictly part of Due Diligence, it is good to have a basic knowledge of the CQC registration process to make you a partner. For a previously single-handed practice, the CQC registration must change from sole provider to partnership, and this takes about ten weeks from start to finish to complete. Adding you as a new partner to an existing partnership, if you are going to be a registered manager, takes a similar amount of time. It is a much shorter process (approximately three-four weeks) to simply have your details (as the new partner) added to the practice’s existing registration.

Under the CQC registration regulations, a new partner cannot be treated, or work, as a partner until the registration changes are finalised. Therefore, if these are not complete by the time you (as the new partner) start working at the practice then you should be treated and paid as a locum or salaried doctor, even if the contract variation documentation has been signed and you are already a signatory to the contract.

A partnership of two or more contract signatories now needs a CQC registered manager and if no-one is currently in place, the incoming and existing provider(s) should decide who this is going to be (it can be more than one person). Once the decision has been made the relevant CQC application form should be completed and submitted. Again, processing takes around 10 -12 weeks to complete, so this application should not be delayed. You will need an Enhanced DBS dated within the last 6 months before applying,
The commissioners will usually want confirmation that the CQC registration change(s) has been applied for, which can be given using the case number references provided by CQC when the applications were submitted to them.

Partnership agreement

The new partnership will require a legally binding partnership agreement (or similar legally binding document), which should be professionally drawn up by a specialist solicitor who understands general practice and particularly medical partnerships. All partners need to understand and agree to the terms laid out and it should be signed to take effect on day one of the new partnership commencing.

The Standard General Medical Services contract states at point 26.2.3. – ‘The Contractor shall ensure that any person who will practice in partnership with it is bound by the Contract, whether by virtue of a partnership deed or otherwise“. This means that any partnership without a signed partnership agreement, or similar legally binding document, would in effect be in breach of its contractual obligations.

Any existing partnership document should be reviewed and brought up to date each time a new partner joins, or leaves, the practice. The purpose of the partnership agreement is to set out the main areas of understanding between the partners, (e.g., profit share) and how these help them work together in the practice.

Without a partnership agreement signed by all partners, the partnership will be deemed a ‘Partnership at Will’. This is a form of partnership that operates under the default terms set out in the Partnership Act 1890, which can have unintended results (e.g., the closure of the practice). It is a partnership without any defined duration that can be terminated at any time by a partner simply writing to all other partners stating they are terminating the partnership. Additionally, if a partner retires, dies, or becomes bankrupt then the partnership is automatically dissolved.

To avoid this, commissioners are now frequently asking for evidence of a partnership agreement being in place, and this can usually be demonstrated by sending a copy of the title/agreement page and the completed signatory page. However, there is no requirement for the actual partnership agreement to be sent to the commissioners even if they ask for it.

The partnership agreement that you receive should be reviewed in detail, and any concerns noted. You may wish to engage a specialist legal advisor, to undertake the review on your behalf, or simply to provide clarification on any concerns that you may have raised. It is important that you clearly understand the whole document; if you do not, then ask questions.

Below is a list of items that should always be included in a good partnership agreement (this list is not exhaustive):

Duties and responsibilities of the partners – It is important to clearly define these
Decision making – The decision-making process/structure should be set out in detail including what happens if there is an impasse
Disagreements – The document should clearly state the processes to be followed if the partners have a disagreement between them and have become deadlocked with no foreseeable resolution
Restrictions – The agreement should specify what the partners are prohibited from doing
Assets (capital and premises) – Clarify what and how the capital assets and premises are held
Profits and losses – State how the profits/losses are to be divided e.g., based on the number of sessions/working commitments of each partner, or all receive a fixed share?
Partnership income – Clearly set out which income should belong to the partnership and what (if any) to the individual partner, including fees for work undertaken outside of the practice
Leave – Include details of all types of leave, (not just holiday or study leave) notice period required, absence for key religious and bank holiday periods etc.
Locum cover – State whether partners have to contribute/pay for locum cover when taking certain absences from the practice, e.g., for sabbatical leave?
Long term sickness – Detail what happens if a partner is on long term sickness? Are drawings still paid in full and for how long? Who pays for locum cover? Will the absence affect their profit share? Is there a time limit in which they can remain a partner and contract holder, etc? For example, if a partner is off sick for a prolonged period (e.g., over 12 months) can they be expelled from the partnership?
Provisions on retirement – Specify when and how partners can retire (e.g., only one in every 12 months)? How much notice has to be given? Is there a clause that provides for compulsory retirement? Do not forget that age cannot be a factor in this.
24-hour retirement – Detail when it can occur and the terms on which a partner may return to the partnership following this, which can be the same as before the retirement was taken.
Expulsion – This is sometimes referred to as a ‘Green Socks Clause’ and the agreement should list the grounds on which a partner can be expelled from the partnership.
Suspension – Detail what happens if a partner is suspended from working by the GMC and/or NHSE.
Expenses – Are items such as medical defence organisation subscriptions, locum insurance premiums etc. considered a partnership expense or one for the individual partners? If so, this information should be included in the partnership agreement.

Joining a family’s practice

A partnership agreement is still a key requirement if you are joining a practice with existing partners from your own close, or extended, family/friends. Remember this is a document that clearly details the business arrangements of all the partners in the practice. So, even if the current partner(s) are family and/or close friends, remember to keep your business head on and protect your interests with a comprehensive partnership agreement that you have had professionally and independently checked.

As mentioned above, without a signed partnership agreement the practice will be a ‘Partnership at Will’, which does not afford you the same legal protections as a partnership agreement.

***Remember that partnership disputes can be both very stressful, and costly***

For further information go to: Why you should avoid being a Partnership at Will – BMA Law

Business Transfer Agreement (BTA)

Although more common in mergers, and not a document a practice is likely to have to hand, a BTA can also be useful if you are joining a single handed or small partnership where the provider/partner(s) plans to shortly retire. This document should be discussed with your potential new partner(s) and written by a specialist legal advisor who is used to managing primary care contracts, partnership agreements and BTAs.

It is a legal document that is separate to the partnership agreement but sits alongside it. The aim of the BTA is to clearly set out details such as (this list is not exhaustive):

The liabilities of the outgoing partner/s that are not being taken on by the incoming partner, (e.g., a known or potential premises liability such as a dilapidation claim)
Business assets that are not being included in the partnership
Outstanding or potential staff grievances, major patient complaints etc. that could involve a financial settlement and who pays for these
Agreed indemnities of each partner for claims prior to the new partner’s start date
Arrangements for the occupation of the premises. This is particularly important if one partner owns the premises and is considering retiring
If you are joining a sole provider who plans to retire shortly after you have joined the practice’s contract, then details of this including retirement date, any payments due etc. should be included in the BTA

Financial

Before signing on the dotted line, ensure that you have reviewed at least the last three years of validated, signed off practice accounts to get assurance of the practice’s financial viability moving forward.

If you do not already have an accountant, you should engage one, preferably a specialist medical accountant, who is used to managing general practice accounts.
You need to review the documents with your accountant (if independent from the practice’s accountant, if not, consider finding a different specialist accountant to assist you). If there are questions/concerns following the review, then a meeting with both parties and their accountants is recommended, unless these are minor and can be easily resolved by email or a phone call.
Financial considerations include (but are not limited to):

Fixed practice assets – You will need to buy your share of the practice assets, which might include the surgery premises, fixtures, fittings, and equipment. The practice assets shares are usually recorded in the partners’ capital accounts
Working capital – You will also be expected to provide your share of the working capital required to meet the day-to-day costs of running the practice. This is also recorded in the partners’ current accounts, and the practice’s accountant should be able to clarify how this is calculated and your options

It is not uncommon for your share of the working capital to be built up over the first few years as a partner by you taking reduced drawings. However, some partnerships may request that you provide an initial lump sum up front on joining the practice.

Profit share – Decisions need to be made and clearly recorded in the partnership agreement, on how any profit share is calculated and divided
Parity – When discussing profit share, clarify if you as the new partner, will receive full parity immediately after any mutual evaluation period (which tends to be the norm nowadays). Or will you be expected to work up to this via an increasing percentage profit share over a few years? This is something that you should review carefully before making any commitment
Private income – You need to get clarity on who keeps the income from any private work undertaken – you or the practice. The same applies to any work that you undertake outside of the practice

When reviewing the accounts, you must ensure that, as a minimum, you look at:

Income – Core contract, enhanced services (national and local) PCN work etc.
Expenditure – Are you happy with these, or could savings be made?
Profitability – Is the practice consistently profitable?
Operating funds – Amounts set aside for the day to day running of the practice. Are these sufficient?
Premises – Are the reimbursable and non-reimbursable costs including rent and services such as telephone etc., clearly shown?
Business contracts – Review all business contracts that the practice holds e.g., telephone, cleaning, maintenance etc. Could they be reduced?
Staffing costs – Are these reasonable and affordable?

Liability

Currently the majority of general practices operate as unlimited liability partnerships as opposed to limited liability partnerships. This type of partnership means that all partners are ‘jointly and severally’ liable (i.e., have collective responsibility) if any financial problems occur, such as debts, or financial claims.

These claims may be contractual, clinical, legal or employment matters, and if they occur then it is the partnership as a whole that would be sued and responsible for the payment of any amount awarded. Therefore, consider obtaining legal advice on any personal implications this may have for you.

It is also important to ensure that the practice has all the relevant indemnity provisions in place (which include, but would not be limited to, employer’s liability insurance, public liability insurance, buildings and contents insurance, clinical indemnity etc.).

Premises

Are the premises owned or leased? If leased, will you be expected to become a joint leaseholder? It is advisable that you become a joint leaseholder sooner rather than later, and you should check the lease to see what your responsibilities and liabilities would be; how much longer it has to run etc. As a lease is a legal document you should also have it professionally reviewed; again, by someone used to managing and drawing up medical premises leases.

If the current partner(s) owns the practice premises, are you expected to buy into them? If so, has a recent property valuation been undertaken? What will your share be? Is the amount of the buy in expected as a one-off payment, or over an agreed period? If a buy-in is not possible then you should ensure that a lease is put in place between the owner partner(s) and the non-owner partner(s); you will need expert legal advice for this.

Additionally, for either leased or owned premises you should check when the last property valuation survey was undertaken, and whether the rent reimbursement is in line with the valuation. This is particularly important for leased premises where the rent reimbursement should cover the cost of the outgoing rent. Also, ask whether any premises development is planned; if so, what, and when.

Information that needs to be considered includes:

If leasehold:

copy of the lease,
copy of relevant insurance documents,
details of service charges, including any outstanding debts,
details of rent reviews, and
restrictions on use.

If freehold:

land registry title numbers,
the title deeds,
details of any charges or mortgages on the property/properties,
insurance documents, and
any outstanding debts relating to the premises e.g., new roof not yet paid for.

Staff

As a partner you become an employer, with joint responsibilities for the practice team working for you.

Although much of the day-to-day managing of staff falls to the practice manager, partners involvement with staff problems/concerns can be quite stressful. If you have only previously been self-employed or an employee, understanding your new staff responsibilities can be a very steep learning curve. Whilst support from your practice manager and more experienced partners is a great help, undertaking employment law courses can be particularly beneficial.

As part of your due diligence, obvious as it may seem, check whether the practice has sufficient staff, both clinical and non-clinical, to run an efficient service, without undue stress, e.g.:

Is there good nursing/healthcare assistant support for the doctors?
Are there sufficient administration staff?
How are any allied health care professionals employed (e.g., via the PCN)?
What are everyone’s duties/responsibilities?
What are the roles/duties of the practice manager?
Are the staff happy and feel supported by the partners? Comments in CQC reports will help here.
Are their salaries commensurate with their roles and responsibilities?

You should also check staff contracts – are staff employed by the practice or current sole provider/partnership? If the latter, do the contracts need changing/updating to include you as an employer? You may need HR advice on this.

Who within the practice is responsible for hiring/firing/redundancy etc., and what input will you have in these processes, if any?

Check whether there are any possible or ongoing staff grievances against the practice, which could result in an industrial tribunal or settlement. If there are, then your position regarding these, and possible costs/payments, needs to be clarified in a Business Transfer Agreement (see above).

In addition to contracts, you should also check that all appropriate staff employment checks were undertaken (and evidenced) prior to the employment(s) commencing e.g., right to work in the UK, DBS check, immunisation status, membership of their relevant professional organisation etc. Again, professional advice and guidance may be required (ACAS, BMA, or the employment arm of your medical defence organisation if it has one).

Also check that staff have received annual appraisals and training appropriate for their role in the practice and that required immunisations are up to date.

Primary care network

Ask how the practice finds working with its PCN colleagues, and which other practices sit within its PCN. Do the partners feel that the practice is an active and valued, participant? If not, why not? Is the PCN well led and by whom? You might also wish to liaise with the PCN’s CD to:

Explore how the PCN is run.
Ask if the practice you are joining engages fully and is supportive of PCN colleagues?
Are PCN decisions made jointly?
Is the PCN funding and expenditure clear and transparent?
What plans are in place for future activity/development?

Patient participation group

Ask about the practice’s PPG.

Does the practice actively engage with it?
Are the members supportive and forward thinking; or mainly critical?
Ask for copies of minutes of meetings (cover at least three years). If possible, meet with the Chair of the PPG to gauge their thoughts on the practice.

Documentation/other

When conducting due diligence, in addition to the documents mentioned above you may also wish to request and review the following (this list is not exhaustive):

Commercial contracts (e.g., telephone, IT, or photocopier contracts)
Clinical and non-clinical complaints (look at the last three years)
Review the patient comments about the practice on their NHS website
Quality and performance information – how does the practice compare with local practices?
Information on health and safety compliance – are there any outstanding issues?
Details of any current or potential known litigation
Review the practice’s GP Patient Survey results and any action plans resulting from these. How do the results compare with other local practices?

Advantages

With all the above to take into consideration, it is easy to forget about the advantages of becoming a partner. Whilst these are many, one of the most important is that you can work with like-minded colleagues and help shape the future of the practice, plus the health care services and provision for your patients. In addition to this there are many benefits for you on a personal level. All in all, before deciding, do not forget to review the advantages (the below is not an exhaustive list) and consider these against the additional responsibilities you would be taking on.

You are in it for the long haul and therefore have greater security and stability. As most partnerships are long-term commitments you have in effect a ‘job for life’ with a (usually) stable income and opportunity of profit share. This in turn can help you with personal and family financial planning such as property purchases, schooling etc.
You part own the business and thus have a say in how it is run. As a partner you have the prospect of contributing to, and help shape the running of, the practice both as a leader and a manager. For example, it may be that partners individually take the lead on key areas such as premises, finance, or HR; if you have a particular skill set or interest then you have the chance to develop and use these for the benefit of the practice.
You can develop staff and their skill sets. You and your colleagues have a unique opportunity to review and tailor the skill set of your team to the needs of the practice and its patient population to meet both short and long-term requirements. For example, this could be by investing in staff training e.g., practice nurse to ANP, receptionist to HCA etc.
As a partner you have a share in the profits of the practice. When it comes to sharing out the annual practice profits this is usually a straightforward process in a traditional GP partnership. The partnership agreement should always detail the profit share arrangements and any specific income streams (or costs) that need to be allocated to particular partners. It should also state how partners can draw down those profits. What must be always remembered is that profits can go up and down.
You will also have input into what services the practice should provide, both in the short and long term. As a GP partner you have in-depth knowledge and understanding of your patient population’s health needs. This gives you the opportunity to work with your colleagues and help decide the kind of care/services that the practice wants to/should deliver to its patient population. Depending on your choices, and with the appropriate agreements, you can also bring in additional income to the practice. Your decisions may then help shape the service provision(s) in your PCN/locality.
You are a leader and so can contribute to the culture, vision, and ethos of the practice. Together partners create the culture, vision, and ethos of the practice and this is something that will develop and evolve as partners come and go. You have the opportunity to contribute to this and ensure that the key, good, standards remain in place.
You have the opportunity to develop your own skill sets/interests for the benefit of the practice and/or wider local population. If you have a specific clinical interest (e.g., diabetes), then discussing with your partners the development of your own skills to establish new services for your practice and/or wider local population could be the first step in adding value (both clinically and financially) to the practice.
You are able to build long-term relationships with your patients plus provide continuity of care to them/their families. As a partner you are likely to be in the same practice for many years to come. This gives you the perfect opportunity to really get to know your patient population, build long-term relationships, and as already mentioned, help shape their health care needs for the future.

We hope this document has been useful and helps you decide whether a GP partnership is for you at this time. If you have any questions regarding its content, or any other queries, then please do not hesitate to contact us at: gpsupport@lmc.org.uk.