Practice Breakups/Physician Departures

Our lawyers represent physicians in matters involving medical practice breakups and separation from employment. Most physicians in private practice become shareholders over time. Shareholder status typically affords significant benefits, including the ability to provide input into the operation of the entity and the opportunity for greater financial rewards, such as profit distributions or dividends.

Various rules, regulations, and internal contracts govern the relationship between the shareholder-physician and the medical practice, including shareholder agreements, employment agreements, and the practice’s internal governing documents. Shareholder agreements tend to focus on the purchase, sale, and transfer of shares in the medical practice, whereas employment agreements typically address the terms and conditions of employment. In addition to these agreements, statutes and common law principles impose certain fiduciary and other duties on shareholder-physicians. Statutes provide minority shareholders with specific rights, and common law principles articulate duties such as the duty of loyalty.

When a medical practice breaks up or a shareholder-physician seeks to separate from the practice, these events trigger various provisions in the applicable shareholder agreement, employment agreement, internal governing documents, as well as statutory and common law duties. They may also trigger regulatory requirements imposed by medical boards and federal law, including patient notification requirements, medical record transfer and retention rules, and obligations related to the privacy and security of patient health information. These situations can be particularly challenging when other arrangements are involved, such as joint ventures or separations involving ambulatory surgery centers.

For these reasons, medical practice breakups and physician separations are complex matters that must be handled with care. Our lawyers represent physicians and healthcare entities in matters involving practice breakups and physician separations. They have worked on behalf of physicians to preserve minority shareholder rights in the context of practice breakups. Our lawyers have also facilitated the separation of physicians from various types of medical practices and hospital systems, including negotiating and executing separation agreements. They have handled mediations and arbitrations stemming from medical practice breakups and physician separations.