Operating a medical practice or health clinic in partnership with other practitioners can be rewarding, but it doesn’t always work out. Serious disputes can arise and, if left unchecked, can undo all the hard work you’ve put into your business. Understanding how to manage disputes and business relationship breakdowns is critical to protecting both your practice and your professional reputation.
Why internal disputes need urgent solutions
Unresolved disputes between business partners or company directors can have significant financial and reputational consequences, including:
Disruption to patient care and daily operations.
Decline in business value and goodwill.
Increased stress and staff turnover.
Long-term damage to professional relationships.
If informal discussions have failed and problems start to escalate, it’s important to take the right actions promptly to protect your investment and interests.
Can we resolve this ourselves?
Every situation is different, however, you may be able to work out a mutually agreeable resolution by using one or more of the following strategies:
Communicate openly: Arrange a dedicated meeting to discuss the issues calmly and professionally, away from the day-to-day pressures of running the business.
Focus on patient care and protecting business interests: Keep discussions focussed on protecting your practice’s reputation, patient care and financial stability, and the long-term goals of each business owner and whether they align, rather than personal grievances.
Check documents: Review any legal documents that set out the terms of your business arrangement, such as a Partnership Agreement, Company Constitution or Shareholders Agreement. These often contain terms that set out steps to resolve disputes between the parties or even an exit process in the event the parties can’t reach an agreement to move forward together.
Clarify Desired Outcomes: Each party should consider what outcome they realistically want, whether this is continuing in business together, adjusting roles or planning an exit.
However, sometimes it is not practical or appropriate for you to try to resolve a dispute internally. For example, if your goals or values are fundamentally misaligned, or there is a total breakdown of trust, or you’ve exhausted all reasonable means of trying to reach a mutually acceptable resolution with the other party. In those situations, it may be time to engage a lawyer to help you triage the situation.
How lawyers can help
You might worry that engaging a lawyer could escalate the conflict, however in our experience this often isn’t the case. Bringing in external experts can help bring clarity and focus to the situation, so you can figure out if there’s a workable path forward, and if not, negotiate how best to move on. An experienced lawyer can:
Assess the facts without emotional involvement.
Help shift dynamics that are holding the parties back from reaching a satisfactory resolution.
Clarify your legal position so you can make informed choices.
Implement the right strategies so you can refocus on providing quality care.
Provide ongoing guidance and support to help you maintain momentum towards a better outcome.
Top tips
If you’re considering legal assistance, here’s how to prepare:
Choose the right lawyer: look for one with expertise in disputes involving medical and health businesses.
Gather background information: ownership structure, agreements in place, key disputes, and any financial or operational concerns.
Clarify your desired outcome: do you want to stay and buy out the other party, or exit on fair terms?
Stay focused on the big picture: avoid being distracted by minor grievances and concentrate on resolving the core issues.
How we can help
For medical and health practitioners in business together, a relationship breakdown between partners or directors is more than just a personal conflict - it’s a business risk. Early legal advice can help protect the value of your practice and give you clear options for moving forward.
We regularly assist medical and health business owners navigate complex partnership and director disputes. If you’re facing issues in your practice, contact us today on 02 9199 4563 or info@kinnylegal.com for expert advice tailored to your situation.
This blog post does not constitute legal advice and should not be relied upon as such. It is a general commentary on matters that may be of interest to you. Formal legal or other professional advice should be sought before acting or relying on any matter arising from this communication.
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