It was the late 1970’s.
The owner of the physician network, one of the earliest managed care entities on the West Coast, was based outside of the country. His business was managed by U.S. based employees.
So, while the cat was away, the mice did play.
Like one of those episodes of a restaurant spy camera show, you know, where they catch the employees of the Italian restaurant running a Mexican food joint from the place on the owner’s day off, the U.S. based managers plotted their own venture. Then they pulled it off.
Similar coups and business cloning often decimate medical groups, both office based and hospital based practices.
1. Hire the right employees.
2. If you trust, you must still verify.
3. You can’t be a completely absentee “owner.” Absent can mean being across the ocean, across the country, or even, in my experience, two floors up the elevator shaft.
4. If enforceable in the jurisdiction, include covenants not to compete in your employment agreements, subcontracts, and ownership documents, e.g., the partnership agreement.
5. In all jurisdictions, include other protective provisions in your deals.
You’ve built your practice. If you do what I recommend, you’ve expanded its operations.
Now protect it.
Comment or contact me if you’d like to discuss this post.
Mark F. Weiss