Medical practice breakups and physician departures are inevitable. Some are the result of professional or personal disputes, and others are simply the result of practical or economic realities or life events (disability, death, retirement, etc.). Whatever the circumstances, failing to carefully execute a plan for the breakup can quickly result in financial, legal, and emotional complications. All physicians and physician practices should anticipate the inevitable conclusion of any professional relationship.
1. Have a Good Contract
When a business relationship fails or otherwise ends, not having a properly done contract that fairly, accurately and precisely sets forth the parties’ respective rights and obligations will be a painful mistake, financially and otherwise. At the beginning of the marriage (or at least during the period that it is happy), the parties should carefully and thoughtfully construct a written agreement that states their meeting of the minds. That contract should also specifically set forth in reasonable detail a road map for the parties to separate when it is time for the relationship to conclude.
2. Carefully Document the Termination of the Relationship
Whether or not the practice had proper preparation before a breakup or departure, both parties should carefully document the final resolution in writing. This is especially the case if the resulting departures necessitate any post-employment obligations such as unfinished payments, restrictive covenants, confidentiality agreements, etc. Important practice contracts and documents should be marshalled and carefully reviewed to determine what the parties’ respective rights and obligations will be in concluding the relationship, including: