Wood & Morgan provides general counsel services to private practice healthcare professionals. Given the firm’s experience in the healthcare industry, it recognizes that doctors have an acute need for well-rounded, multi-disciplinary professional advice regarding legal and business issues. We often assist doctors with forming their professional entities, negotiating commercial leases and navigating tricky labor and employment issues. In addition, we are well-equipped to facilitate a doctor’s acquisition of a practice or sale of the same to either another doctor or to a private equity backed group. Although these tasks appear straightforward, it is critical that doctors receive sound legal and business advice to ensure their interests are protected.
Forming a professional business entity is critical for a doctor’s legal protection and financial success. A properly formed and maintained professional entity, whether a professional corporation or limited liability company, will protect an individual doctor against liability that is unrelated to professional negligence or malpractice. The entity effectively shields a doctor’s personal assets from claims by vendors, employees, partners, and sometimes landlords. Certain guidelines and restrictions must be followed to ensure this shield is not subject to penetration and we routinely advise our clients on how to protect themselves. Professional entities can also enrich doctors as they allow a doctor to deduct various business-related expenses to reduce overall tax liability and reposition their investment strategies to increase returns.
Commercial Leases and Acquisitions
One of the biggest mistakes we see doctors making is negotiating and closing their own real estate transactions – whether a commercial lease or acquisition. It is incredibly easy for a physician to believe that they are getting a good deal because they conducted an initial market scan. However, upon close inspection, the landlord often gets an upper hand because they either have effective representation or better information. The firm’s general recommendation is that our clients retain a licensed real estate broker to negotiate the financial terms of a lease or acquisition and counsel to ensure that the legal terms of the deal are reviewed and revised to protect the client. With commercial leases and acquisitions, it might be years before the client realizes that an error was made. It is always wise to have an experienced, professional team involved to ensure that you are protected in real estate dealings.
Labor and Employment Issues
Document everything. Improperly managed labor and employment issues can devastate a practice and an owner’s life. It is critically important that doctors effectively manage their employees and take precautions to protect the practice and their personal assets from employee claims. When claims are made, justified or not, the party that effectively documented the facts and events giving rise to or related to the claim has a significant advantage. The firm offers pre-litigation and dispute resolution advice to our clients to avoid and minimize the likelihood of labor and employment lawsuits against its clients and draws on its experience as general counsel to thousands of offices throughout the country. Remember, document everything.
MSO Business Dealings
As a private practice physician or the managing partner of a private practice medical group, it is imperative to retain experienced legal counsel and business advice before initiating a transaction with private equity, venture capital, a major hospital group, or a medical service organization. Too often we are approached by potential clients after they have begun negotiations with a potential business partner, which can prevent the client from negotiating the best deal on the best terms.
We commonly find our clients in the following position: 1) the client receives an unsolicited bid from a prospective buyer or business partner; 2) the client consults with its team and decides they would like to evaluate the offer and other potential offers; 3) the client requests bids from a few other prominent potential partners; and 4) the client evaluates the received offers, selects one and executes a term sheet. While this is rational and relatively reasonable, this process does not always result in the best offer for the client on the best terms.
This follows because the business and corporate development professionals employed by these firms are highly sophisticated and are interested in maximizing their bottom lines. As a result, while an offer may seem fantastic, it may only be fantastic for the acquiring firm.
If you have questions about transacting with a potential acquirer or partner, please do not hesitate to call the firm to discuss strategy and the costs and benefits of the opportunity.