Associate Agreement - Part 1

ASSOCIATESHIP AGREEMENTS

IT DOESN'T take long for the issue to be considered. Some individuals ponder the option long before they graduate from chiropractic college. Others wait until the long sought after parchment is just months away. Finally, others wait until after graduation and years after practising until they contemplate the good, the bad and the ugly of "Associateships". It doesn't matter when the thought first arises, the issues are the same, and the turmoil which they create can be agonizing in both financial, professional and emotional terms.There are a number of considerations that must be taken into account when even contemplating the prospects of becoming an associate, whether as the doctor who owns the practice or the doctor who is joining the practice. While each situation is as unique as the address attached to the practice, there are certain characteristics of associateships which permeate all associate arrangements.

It is these general principles which are the subject matter of this article.It would seem trite to suggest, and it goes without saying, that before anyone participates in an associate practice, he or she should take a long and deep breathe and contemplate just what it is that they are seeking from such an arrangement. It has been the writer's experience that there are as many reasons for becoming an associate as there are for not becoming an associate. The reasons for wanting to become involved in an associateship relationship include the following:

1. a need for companionship
2. a desire to earn instant income
3. a need for assistance in paying expenses
4. a lack of capital to establish an office
5. a need for referral of patients
6. a need to seek the expertise of an associate
7. a need to be able to begin spending time away from the office.

As in most business arrangements, there are good and bad reasons for making an economic decision. Such is the case with associateships. There will be a very large difference between the benefits and detriments of such a relationship depending on which individual we are examining in the associateship arrangement, namely the new doctor at the premises or the owner of the facilities.However, prior to dealing with the reasoning behind the relationship, mention should be made of what actually constitutes an associateship.

There are different arrangements all of which can constitute an associateship, namely:

1. an established doctor with a new practitioner at the premises (the new doctor may be a recent graduate or a veteran doctor)

2. two doctors, (veterans or new graduates) who wish to establish a practice together other than as partners.There are additional terms which might be used for such arrangements, ie. a joint venture or an independent contractor. Such terminology only describes the particular situation.

In any event, no matter what the doctors label the arrangement, the relationship is that of an associateship. Neither the terminology or the documentation arising from the agreement of the parties will generally change the fact that an associateship arrangement has been created by the doctors.In terms of why a doctor will enter into an associateship arrangement, the two doctors may have diverging and quite different intentions in creating the relationship. A doctor who has been established for some time may be looking for someone to assist in the practice by taking on some of the burden of the expenses of the practice or the patient load.

In addition, the doctor may be contemplating retirement in the immediate future or may be looking for someone to purchase the practice. On the other hand, the new doctor at the premises may be looking for a place to practice without the necessity of having to pay for the capital costs associated with the establishment of a practice; desire an immediate flow of patients; or wish to acquire a practice over a long-term basis. Whatever the reason for entering into such an arrangement, the possibly worst reason to base an associateship on is that of "money".

Associateship arrangements are not generally considered to be relationships which will last forever. There is a benefit to all parties, but this is a reality (the termination of the relationship) which must be considered by the parties which should never be lost in the negotiations which begin with the best of intentions and invariably wind up with an agreement which the parties will have to live with for many years to come.

At the outset, each practitioner should consider very carefully why they want to enter into the arrangement. Is there a logical reason to associate and are the parties consistent with their intentions? There is no likelihood of a successful, long time association between two doctors if one of the practitioners is looking to the arrangement as providing nothing more than income to pay expenses and the other practitioner is seeking a patient base which will not be forthcoming.

Above all else, the practitioners should not fool themselves into thinking that their motivations will result in a successful associateship.There may nothing wrong with an arrangement being based solely on the economics of the relationship with the established doctor providing nothing but space for a return of income - as long as both parties are on the same wave length, that being that the arrangement is really only that of a "landlord and tenant". However, associateship arrangements usually contemplate a greater relationship between the parties.

In any event of anything else, the first place to start in the creation of an associateship is that of the personalities of the doctors. There is nothing, and this cannot be overemphasized, and no matter how good the intentions of the parties might be, that can save an associateship from failure, without a sense of cohesiveness and the ability to interact between the doctors. The issues surrounding personalities include ensuring that the new doctor is able to interact with not only the established doctor but just as importantly, the staff of the practice, are paramount.It is impossible to have a successful associateship if the doctors have a different philosophy concerning any number of issues including the philosophy of a chiropractic practice, the economics of the practice, or the manner in which staff are to be dealt with. A difference in practice technique may be disruptful to the relationship, particularly in the event that the practitioners will be providing locum services for each other. Unless the parties have a consistent approach to the way in which an office and a chiropractic practice (and maybe even though own lifestyles) are to be operated there is no need to proceed further in the negotiations leading to the creation of an associateship.

Once the reasons for associating have been acknowledged and the parties understand that the relationship is to be based upon a solid foundation, then the next step is to negotiate the arrangement which is to govern the parties relationship for many years to come. In the next article, we will examine the necessity and the substance of documentation which will evidence the arrangement between the parties, and begin to deal with the terms of the "agreement".

****