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Practice Managers as Partners

on Thursday, 26 July 2018.

At our most recent Practice Management conference in Bristol there was some discussion from the floor regarding practice managers becoming partners.

A small but significant minority of the practices we act for have non-GP managing partners, and there is every reason to think that there will be more of them in time. Practices are also looking to broaden the range of individuals who become partners by taking on nurse practitioner partners, pharmacist partners, and so on. Why should practice managers (PMs) not become partners too?

Why Become a Partner?

For the practice managers, the motivation could be the prospect of earning more money. Achieving the status of Partner may be seen as important - appearing on the firm's notepaper may look good, but such considerations have to be balanced against the commercial risk and liability which comes with being held out as a partner. It may also be less difficult to manage one's peers, than it is to manage one's employers!

How Much Should a Managing Partner Receive?

At the conference the question was asked: what level of profit should PMs receive on taking on partnership? There is of course no correct answer to this and our experience is that the profits due to practice manager partners vary widely from one practice to another. One sometimes sees practice manager partners receive a fixed share, equivalent to his or her salary beforehand. At the other end of the scale we have seen practice manager partners receive a full parity share, equivalent to a full time GP.

If a practice manager partner is to argue his or her case with the partners, the issues for discussion will largely be the same as one would raise when discussing a pay rise: in short, what value you add to the practice and how much easier you make the partners' lives. The higher performance a PM partner can demonstrate, the higher he or she should expect his or her profit share to be. The difficulty of course is measuring a practice manager's performance in the first place - which is where the negotiation skills come in!

Technical Considerations

Under the GMS Regulations, a PM can become a partner, and a signatory to the GMS contract, as long as there is at least one other partner who is a General Medical Practitioner.

As far as the other partners are concerned, they should be aware that by making the practice manager a partner, they are conferring presumed authority on the PM to bind the Practice for all liabilities incurred in the ordinary course of the business (no matter what limits may be set out in the partnership deed).

Any practice manager should be aware, of course, that by becoming a partner they assume joint and several liability for all risks and liabilities of the partnership business, including liability for professional negligence claims. So a new managing partner should make sure that appropriate insurance cover is in place. This is generally not very expensive.

If the PM is to be a salaried or fixed share partner, he or she should consider obtaining a release from principal creditors of the practice (eg a bank or a landlord) making it clear that the practice manager, although held out as a partner, is not responsible for those liabilities.

Loss of Statutory Rights

A practice manager should be aware that by becoming a partner, they automatically cease to have the many employment protection rights and benefits, which go with employed status. Whilst the normal anti-discrimination legislation generally applies to partnerships, rights not to be unfairly or constructively, dismissed will not be applicable nor the statutory rights to maternity or adoption leave, which should normally be replaced by appropriate provisions in the partnership agreement.

The Partnership Agreement

Other amendments will be needed to the partnership agreement. For example the GP partners should indemnify the PM against any clinical negligence claims. They may also take the view that, in strictly clinical matters, the practice manager should not have the same right to vote. Either way the deed must be updated on or before the date the PM becomes a partner - otherwise the old deed will not apply; it won't bind the practice manager and it will cease to apply to the other partners too.

We can of course assist with making the necessary amendments to the partnership deed and would be more than happy to support your practice. 


For more information, please contact Oliver Pool in our Healthcare team on 0117 314 5429.