Dental Partnership Agreements

Cynical conventional wisdom suggests that all dental partnerships are destined to fail. If not structured properly, that can very well be true. Almost counter-intuitively, the more successful a dental partnership becomes, the more opportunity arises to squabble about work load, profit distribution, and other arrangements. It is important to establish clear ground rules—preferably before any money is at stake—that are fair and equitable while also providing for orderly adjustments as needs of the practice change.



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Dental Partnership Agreements

A Dental Partnership Agreement is the "bible" to successful dental partnerships.

Dental practices generate significant income. That income must be divided among the dentists, but failing to outline exactly how that money gets divided, who divides it, or when it gets divided, can destroy numerous practices and friendships.

Developing a sound dental partnership agreement involves insight from accountants, insurance specialists, and other consultants familiar with the dental industry and the pitfalls most dental partnerships often encounter.

We help partners understand what issues need to be addressed. Some of these items include:

  • What "perks" are available
  • What happens when your partner dies?
  • What happens when your partner's license is revoked?
  • What kinds of decisions are the majority or minority entitled to?
  • Who makes final financial decisions?
  • How do you determine when to bring in a new partner or hire an associate?
  • What happens when one partner wants to franchise or buy another office, but the other does not?
  • Do the partners owe complete loyalty to the partnership, or are they permitted to enter into other ventures?

When Should the Partnership Agreement be drafted?

We prefer to build the dental partnership agreement before there is a single penny on the line. Developing a partnership agreement necessarily involves some awkward conversations. These conversations are much more comfortable, however, when there is no money at stake. The resulting partnership is more principally sound. Additionally, involving outside team members in the development of the partnership agreement allows the partners to gain valuable insight into the viability of the partners' business model, thereby ensuring that the eventual dental practice is positioned to succeed.