In fact, even if the partners never end up falling out, the time and money spent on drawing up their partnership agreement is not wasted. The very process of drawing it up, and discussing every aspect of the business relationship, is a valuable exercise; going through this process, and ensuring that there is the necessary 'meeting of minds' between the partners helps head off any disputes from arising in the first place.
Without a partnership deed, the partners are in a very difficult position if there is a dispute, or anything unexpected happens, like illness, sudden retirements, suspensions, or even death. If there is no partnership agreement in place then the partners have to fall back on the rules set out in the Partnership Act 1890, which is about as out of date as it sounds. Its default rules include:
Many practices think they have a partnership deed, when in fact they don't. Partnership deeds can fall away in certain circumstances, the most common of which is when a new partner joins without signing anything. Some case law suggests that, in such situations, not only is the new partner not bound by the existing deed, but neither are the incumbent partners - even if they signed it, and are all, in fact, a partnership at will! This is why when a new partner joins, the aim should always be to get them to sign the deed on or before the date they become a partner.
A common misconception is that it is all right to wait until the end of probation before signing a new deed. This is a very bad idea. Firstly, the arrival of a new partner can change dynamics within the partnership and lead to disputes - so it is a bad time to be without a partnership deed anyway. Secondly, the only way you can enforce a probation in the first place is if the new partner has signed the deed!
Outdated partnership agreements are better than nothing, but given how often things change in primary care, it is important that the agreement is updated every few years. A partnership agreement that hasn't been touched since 2015, for example, will be flawed in a number of respects, in that it will not reflect: