Super partnerships: could they benefit you?
The key things to explore before entering into a super partnership
With the drive to encourage GP Practices to work more collaboratively, we have seen the emergence of so-called ‘super partnerships’. As a business model, a super partnership describes a situation where multiple practices have agreed to merge and/or work together whilst retaining the traditional partnership model.
If you are considering establishing or entering into a super partnership, what are some of the things you should consider?
1) Centralised or decentralised partnership?
The starting point is to consider how much autonomy each individual practice will have within the super partnership. In essence, there are two general options. a. A centralised partnership, where all decisions relating to the partnership and each of the practices which form it are made centrally. b. A decentralised partnership, where a degree of autonomy is retained at individual practice level, with decisions on issues such as operations and staffing are delegated to those partners operating from the relevant practice.
There is no right or wrong answer as to which option should be adopted. In our experience, a degree of decentralisation will be needed. This reassures partners and practices that they will not completely lose their identity and/or autonomy by entering into such a model, as well as ensuring that decision-making doesn’t grind to a halt.
2) Core contracts
Consideration must be given to how each individual practice’s core contract will be handled. Possibilities include all contracts being retained, or a single contract being retained and varied to cover all practices. Whichever option you may consider, care should be taken to ensure that any proposal does not undermine the overall contractual value/income, and that it does not expose the partnership to unforeseen extensions to their practice area.
The above aside, early discussions with commissioners will be needed to ensure that they approve your proposals. As part of this, there may well be the possibility of unlicking funding (from sources such as the resilience fund) to assist in the creation and initial operations of the super partnership.
3) Partnership agreement
As with any regular partnership, it is crucial that the partners of the super partnership have a written partnership agreement in place to govern their working relationship with one another.
These agreements will need to cover, amongst other things:
a. The way in which decisions are taken (if there is to be a degree of decentralisation, then it needs to be clear what decisions are reserved for the full partnership, and those reserved for practice or committee level)
b. The duties and obligations on each partner (including their sessional and, where relevant, out of hours commitment)
c. The circumstances where a partner can be suspended and expelled from the partnership
d. The process for taking on new partners
e. The process for handling an outgoing partner’s share in the partnership
f. The leave arrangements
g. The way in which your practice premises is handled and occupied.
Issues regarding premises can appear exceptionally tricky to resolve. However, all issues are capable of resolution and such resolution starts with asking the right initial questions.
These questions were considered as part of a recent presentation, delivered as part of the BMA’s recent working at scale conference. The presentation from that conference is available on our website.
4) Pre- and post-liabilities and income
You should consider how any liabilities and income of the individual practices involved in the super partnership are to be handled. Usually you would expect both income and liabilities to be apportioned on a time basis, with those attributable before the date the partnerships merge to rest with the individual practices (or the partners operating the same) and those attributable to the period post-merger resting with the enlarged super partnership.
5) Due diligence
A degree of due diligence should be carried out to ensure that you are clear on the financial, legal and practical position of the other practices. To give some reassurance, it is rare to find a situation where any issues prove terminal to any decision to work together. Their identification usually leads to a reasonable decision being taken over the handling of the issue in question.
If you need support in entering into a super-partnership, or you are exploring other ways of working at scale, BMA Law can help. They offer expert legal advice, with preferential rates available to BMA members.