In this episode, hosts Brad and Michael discuss a physician’s experience with adding a new partner to his practice. Learn about the challenges he encountered and how careful vetting and planning can help you avoid common pitfalls. Tune in for insights to help you expand your team and scale your practice successfully.
Listen to the full episode using the player below, or by visiting one of the links below. If you have any questions or would like to learn more, email us at info@byrdadatto.com.
Transcript
*The below transcript has been edited for readability.
Intro: [00:00:00] Welcome to Legal 123s with ByrdAdatto. Legal issues simplified through real client stories and real world experiences, creating simplicity in 3, 2, 1.
Brad: Welcome back to Legal 123s with ByrdAdatto. I’m your host, Brad Adatto, with my co-host, Michael Byrd.
Michael: As a business and health care law firm, we meet a lot of interesting people and learn their amazing stories. Brad, this season we are talking about businesses who decide to double down. They’re going to scale their business. Our theme this season is Growing A Business.
Brad: That’s awesome. And for those that don’t know, Michael, that’s just one of four seasons. What are the other ones?
Michael: Yes, we have the building season. So you’re starting a business. We have the operating season – you’re running a business. We’re in the scaling season. It’s time to grow, and then next season will be the buying and selling season.
Brad: That’s awesome. Well, Michael, you’re up to bat. What do you have in store today?
Michael: Well, Brad this is a news flash. [00:01:00] You and I are entrepreneurs trapped in lawyers’ bodies.
Brad: Yeah. It’s well established. And from our prior shows, plus that tattoo you have in the back that says serial entrepreneur for some reason. But why’d you bring this up?
Michael: Well, I have a business idea, and it’s based on a recent article I read. I don’t know whether this is evidence of the downfall of society or the entrepreneurial spirit at its finest.
Brad: Well, I know that our audience, and frankly, Kennedy and I don’t have a choice, so tell us what you got.
Michael: Okay. Need a little context. You know, I love context. The context is that in Indonesia, okay, running has become really popular, and I think the article attributed it to kind of a post-Covid health awareness and several celebrities in Indonesia have taken up running, and so it’s kind of a thing there.
Brad: I’m sending myself an email right now. Note to self, [00:02:00] do not move to Indonesia unless you want to run. Got it.
Michael: Ye and there is no ByrdAdatto office there too.
Brad: Okay, good.
Michael: Well, Brad, yeah, there is a viral trend that has developed based on this new culture of running.
Brad: I don’t know if this is a red flag season or not, but you can’t tell a story that talks about COVID-19, then use the word viral and make me think this is more like the downfall of society type of situation.
Michael: Fair. Fair. Okay, I have a question for you. Are you aware of the app called Strava?
Brad: Negative.
Michael: Okay. You just kind of made yourself look bad.
Brad: That’s okay. So sorry everybody out there doing that…
Michael: For the other few, like Brad that don’t know what Strava is, it’s a running app – or an exercise app, actually, that I actually have. My brother-in-law has it, and it tracks your workout activities, and I think the idea behind it is you get followed by your friends and you get a kudos [00:03:00] if you go and run three miles. I haven’t gotten a kudos in a while, but for those that do they get them, my brother-in-law uses it every day. I see his activities. I think the spirit of it is to build this community of support. But there also is an element of look at me and what I’m doing.
Brad: Well, in the old days, that was your gym buddy, your gym rat buddy that you would go to work out with. And you’re building a kind of, in this case, a virtual community of gym rats.
Michael: So, as you might imagine in Indonesia where there’s this culture of running Strava is a big deal.
Brad: Okay.
Michael: Because people want to talk about what they’re doing. Well, this business idea that’s developed there is, there is something called Strava Jockeys in Indonesia. And they sell their running and cycling accomplishments on Strava to clients who don’t really have time to actually do the exercise, but they have the money to [00:04:00] pretend that they did something amazing.
Brad: This sounds like this whole community is built on a throne of lies, Michael. I mean, based on the app, I’m now worried about our business idea that you are so excited about.
Michael: Well, it’s not we, Brad. It’s me. It’s my business idea.
Brad: Okay.
Michael: Well, I was thinking you would want to buy one of my tennis trophies to put up in your office.
Brad: You know, Michael, I don’t think that’s a great idea as I really don’t want any of your tennis camp participation trophies.
Michael: Well, one of the benefits of being old, like you remind me every episode is I lived in an era before participation trophies, so you can actually buy a real trophy and put it up in your office and I think it’ll gain you lots of street cred.
Brad: Yeah.
Michael: Well, would you be more interested if I sold you one of my typing medals?
Brad: Now we’re really attacking the big bucks here, audience members. I think if I looked it up recently on eBay [00:05:00] that, I mean, it’s somewhere between a $1.50 to $3.00 is what I see typing medals go for, but still, what does it have to do with today’s story?
Brad: I’d sell it to you for $3.00. Our story today is about adding a partner. When interviewing a potential partner, I guess we need to be more careful, Brad, than ever when we’re looking at someone’s resume because you don’t know if it’s actually their accomplishment.
Brad: Okay. I think you’re really stretching yourself with this whole story to roll it into our episode.
Michael: I really hope that you didn’t use the word stretch as a dad joke, a running dad joke.
Brad: Good.
Michael: Just, let’s jump in.
Brad: Alright.
Michael: Brad, our client in today’s story is a successful plastic surgeon on the East coast with a growing practice. We will call him Dr. Steve Prefontaine.
Brad: Okay. I like how you jumped from a running app to bring the name of one of the [00:06:00] most famous long distance runners in the US, for those who don’t know, his nickname was “Pre” and before his untimely death in a car wreck, at a very young age, he was setting all kinds of US running records.
Michael: Well, forget the part about him dying because our client Dr. Steve is very much alive. And I’m just trying to hang on dearly to the Strava jockey thread.
Brad: Okay. Well keep running with it, and pun intended.
Michael: Okay. Dr. Steve has actually been in scaling mode for several years with this practice.
Brad: Give us more context. How so?
Michael: Okay. They all start together. So, I’m going to kind of timeline this and we’ll talk through just to catch up on, to get a real picture of Dr. Steve and what he’s been up to. He always has an idea. I recall the first thing he did as his surgical practice started to become busy was open up a medical spa.
Brad: Okay. That seems a little unusual. I mean, Dr. Steve, he’s becoming [00:07:00] busier in the surgical room. And his response was to had a whole new service line, which is non-invasive services. I’m wondering why he just diversified both his resources and his processes when he was already really busy with surgery, because it feels like he’s adding additional pressure at this point.
Michael: Yeah. He wanted to scale, and his vision for what he’s trying to build has multiple service lines. I think going back, and this is actually that this part of the scaling was before we started working together, but I know him so well now with all the other things he’s doing, I know how he thinks and it’s get this thing up and running and what’s next. Like, he’s a dreamer, and so time has not been an issue for him all along. It’s like, I’ll just work harder to make things happen. And so, we’ve discussed these [00:08:00] kinds of pressure points. You and I have discussed these with Dr. Sacha Obaid when he was on as a guest, but he was not done. In fact, he was just getting started, Brad. Next, Dr. Steve built a surgical suite.
Brad: Love it. Okay, building a surgical suite with a surgical practice. I like that because it’s helped him grow his surgical procedures or ability to capture probably even more revenue.
Michael: Yeah. And we talked a lot kind of on that prior episode with Dr. Obaid just about the issues in prior other episodes on setting up a surgical suite. So after he did that, he opened up a recovery suite or as they say on the street, a medical hotel.
Brad: Yeah. And I’ll take a step back here. For those who don’t know these kind of terms, there’s a couple key points. First is, in general, coverage suite is a suite that really is designed for patients when they’re recovering from a surgical procedure or some type of invasive medical treatment. [00:09:00] These recovery suites are often including certain medical services like nursing or monitoring equipment or access to particular drugs or medical professionals. Basically, a place for postoperative care. Extremely common, obviously in a hospital situation, however with plastic surgeons in many states, they may have a separate, as you call it, “medical hotel” designed to accommodate patients who are traveling for medical treatments and they don’t necessarily want to go get a hotel room. These aren’t very intense medical procedures, but it’s a place where they have a stay and much like the recovery suites, they’ll have certain post-treatment recovery processes in place with the right staff and stuff. Many of these same medical services that are provided, like I said, in the recovery suite will be there. A lot of these questions come up when we start talking about that meaning like, well, is this done in their medical practice or does this have to be done in a licensed hotel? Or is it a licensed convalescent facility? You know, we could probably spend a long time getting really deep into the weeds in that, [00:10:00] but just for our audience members, I wanted to give some context.
Michael: And it is a little bit of a red flag when we hear the word hotel, because oftentimes you don’t want to be treated like a hotel, and from a compliance perspective. But you’re right – I mean, and just for our audience that have thought about doing this, think about you have a patient in a room and they’re probably have an IV going and they may have post-op care happening and medications that may be being dispensed or given to them. And so, there’s a host of compliance questions to your point of solving, and it’s state by state, to make sure it’s, it’s set up in the correct way. And also, not the least of which is kind of a liability protection. You have someone in post-op, and so if something happens that goes bad in post-op, what does that mean as it relates to the chain of care? [00:11:00]
Brad: Like I said, we could spend another 45 minutes in that piece alone.
Michael: Right. So, Dr. Steve got it going. He’s gotten busy up to this point by adding these other things that he decided it was time to add a surgeon. And so, he hired someone to join his practice. He actually hired a young plastic surgeon out of fellowship training. We will call her Dr. Flo-Jo.
Brad: I guess Olympics were recently, but I guess you’re referencing the famous Florence Griffin-Joyner. She also passed away I think in the 1990s, late nineties, 1998. Is there a reason why you keep picking these deceased runners by chance?
Michael: Maybe we’re establishing that running is bad for your health.
Brad: I’m good with that.
Michael: Well, no, seriously these are the first names that [00:12:00] pop to mind when I was trying to think of a famous runner to hold dearly onto my Strava Jockey thread.
Brad: Flo-Jo was famous.
Michael: But also know that Dr. Flo-Jo in our story is very much alive.
Brad: And Michael, I kind of want to take another step back here, audience members to stick with this here. For those who are not familiar with this entire process of bringing on a fellow, there’s a whole – they’re finishing their training and they’re now negotiating most of the time with the owner of it. And one of the things we’ve talked about in other episodes is really making sure that the first thing that is, what type of alignment is there between the owner and fellow and once, and while going through that is we want to figure out what does each party bring to this particular relationship? And once you determine that there is some type of alignment, the traditional next step is that this young doctor is going to get hired hopefully with a well-developed contract.
Michael: What? You want a contract?
Brad: Yeah, I know. Written and everything. Oh, okay. and keep that fellow busy. and this is done by sometimes that, that this young fellow comes [00:13:00] over and the owner says, I don’t like doing these kind of cases. I’ve been referring them out. I’d like you to take them over. Or, I’m so busy with this particular procedure, I’m booked out so far in advance, you can take these over. And then sometimes they’re like, “Hey, go figure it out yourself,” which we’ve talked about in other episodes. No matter what the model is, Michael, to be successful, that senior physician will need to be engaged and dedicate some time, even though he is, as you said, Dr. Steve we’re already really busy, but he needs to think about how does he want to train this young physician and how to treat practices and do things properly in his practice.
Michael: Yeah and it’s a great point too and here I probably should have said this that Dr. Steve is trying to take over the world.
Brad: Oh, good. I like that.
Michael: So in his mind, Dr. Flo-Jo means more patients. He wasn’t going to give up his practice or his patients, so that really required them to get on the same page. Well, how are you going to get busy? Because there [00:14:00] wasn’t a patient waiting to be operated on when Dr. Flo-Jo arrived and they worked well together. They had a marketing plan.
Brad: You were trying to figure out how she would get out of those blocks fast?
Michael: Oh, Brad. Oh, I just saw your eyes light up and I knew something bad was about to happen, but Dr. Steve was not done. We’re still…
Brad: This is like one of those informer, but wait, there’s more.
Michael: There’s more, Dr. Steve decided to scale to a new location by acquiring another practice, a retiring surgeon’s practice.
Brad: All right. Tell us our audience, and actually me too, about this acquisition.
Michael: This acquisition actually captures the essence of Dr. Steve. I really think he is more of a relationship collector than a business collector. I get that he had built a relationship with a retiring plastic surgeon in a neighboring community and they started talking. I think that the retiring doctor was like, “Hey, do you want to buy my practice?” And Dr. Steve’s first answer is always yes, and then he starts to figure out how and why after that. So Dr. Steve decided to buy this practice from this retiring physician, and we will call him Dr. Strava.
Brad: You’re, you’re just not an attempting get up with any new names for runners now. Okay, at least you stopped with the Dead Runners and now he’s doing a running app. Let’s get back to the story. What is the goal of this acquisition then besides taking over the world?
Michael: Maybe after he said, yes, he figured out the why, but his why was that he did like this physical office, and it also had a bigger surgical suite, and so he needed more or space. And then of course he liked the idea of getting Dr. Strava’s patient. [00:15:00] Dr. Strava was ready to be done, but Dr. Strava agreed to stay on for four months after the acquisition to help transition patients over to the practice.
Brad: All right. I don’t know about the audience, but I’m starting to get tired of all this different activity that’s happening.
Michael: I know. I often would talk to Dr. Steve as he was on a morning run with his ideas. And I’m not making this up, Brad. Dr. Steve is an actual runner, and I think that is where a lot of his crazy ideas start or I would get those phone calls.
Brad: So have we covered everything with the scaling so far?
Michael: Actually, no.
Brad: Yeah. This again is an info commercial.
Michael: We actually had to cover all of this?
Brad: Okay.
Michael: To build up, to get to the challenges of our topic today, which is the challenges of adding a partner.
Brad: All right. I figured we were going to talk about Dr. Flo-Jo or maybe Dr. Strava. There’s more… [00:17:00].
Michael: Yes. Well, for sure, there’s worthy lessons to be learned by bringing on Dr. Flo-Jo or Dr. Strava. But here for our episode today, Dr. Steve had finally reached the point where he was running out of time. He realized there was only 24 hours in a day.
Brad: He finally figured that part out.
Michael: Yeah. It took a while. And he needed relief from his surgery schedule because he was spending so much time on the business side of his practice with all these things that he had acquired. And the problem was that Dr. Steve was well established in the community for his type of cases and he could not hand these off to Dr. Flo-Jo, who by the way, was already fully booked anyway.
Brad: So she did get out of those blocks fast.
Michael: She did.
Brad: All right. So what did he do?
Michael: He actually hired a senior plastic surgeon in the community who was known for the same procedure. The senior surgeon was tired of running his own practice. [00:18:00] And for his kind of final chapter, last five years or so, he was ready to be an employed surgeon. And we will call him Dr. Jesse Owens.
Brad: Seriously, Michael, another deceased runner. All right.
Michael: Well, the runner may have died back in 1980, but Dr. Jesse Owens is very much alive.
Brad: We’ve established that we only have live doctors here. Okay. So we’ve kind of seen this movie before when you’re adding a senior level surgeon. But like all new relationships, there’s definitely have some unique challenges.
Michael: Yes. Let’s go into commercial and on the other side, explore the issues that go with this scaling strategy.
Access+: Many business owners use legal counsel as a last resort, rather than as a proactive tool that can further their success. Why? For most, it’s the fear of unknown legal costs. ByrdAdatto’s Access+ program makes it possible for you to get the ongoing legal assistance you need for one predictable monthly fee, that gives [00:19:00] you unlimited phone [00:19:00] and email access to the legal team so you can receive feedback on legal concerns as they arise. Access+, a smarter, simpler way to access legal services. Find out more, visit byrdadatto.com today.
Brad: Welcome back to Legal 123s with ByrdAdatto. I’m your host of Brad Adatto. I’m still here with my co-host, Michael Byrd. Now Michael, this season, our theme is growing a business and we’re talking about real stories with our clients and how they pop up during a scaling season. And we’ve been talking about Dr. Steve and his actual running and running, by running a business and running in the sense of scaling activities. And when we left off he was not done with just hiring someone here and there. He keeps bringing these individuals in, but we just learned that besides Dr. Flo-Jo, he’s actually started to add other people. But maybe hold on, maybe before we go too in depth to the story, Michael, before we learn what happened to Dr. Steve and all the new hires, [00:20:00] let’s talk about some of the special issues that go with hiring the senior doctor that you brought in Dr. Jesse Owens right at the end before we went to commercial.
Michael: Yeah. There’s a lot of obstacles that you have to be prepared for. It can kind of hit you hard because you’re hiring someone who, the positive of course, is that they’re well trained and you should expect a highly skilled surgeon coming in. The flip side is that they’re old and they have.
Brad: Not that there’s anything wrong with that.
Michael: Clearly not, because you and I are sitting here and we’re not going to judge ourselves. But one of the things you’ll see as an example is maybe they still use paper charts, so they’re kind of using analog systems in a digital world. Other things you might run into as you’re now trying to – use the expression, teaching old dog new tricks. And so [00:21:00] getting into this new environment where you’ve got a modern approach to running a medical practice can create a ton of friction when they’re coming on. Usually they’ve never been an employee before. And so now all of a sudden you have this new role that they’ve never done, and they’re used to calling their own shots. That creates friction. If they’re coming from a hospital setting into a private practice setting, we see a ton of issues there because the customer service focus is just not at the same level when you come from a hospital setting typically. And so feeling like you have to land a client, the salesy approach is very foreign and not usually a skill that’s there. So when they do a consult, the conversions can be a real challenge. And so, you have to plan for all of these types of things. [00:22:00] And so, the main observation is that if you go kind of blindly thinking, I’ve got this amazingly skilled surgeon and I’m going to plug and play and it’s going to give me relief, then I don’t have to worry about it. That doesn’t work. You have to plan for the unique issues that go with integration into the practice.
Brad: Yeah. And that kind of reminds me of a story which I won’t bring their docs names in, but we had a group that we worked with out of Colorado. These two individuals had been residents together, had trained under who they perceived to be one of the best surgeons ever. They both went off, went off to Colorado, and ended up years down the road working together, growing a very nice practice. They found out their mentor, who they believe was one of the best surgeons ever, decided that he will also want to move to Colorado randomly. And so they said, come join us. We’re so busy, we’d love for you [00:23:00] to be a part of this. So they were super excited to have their mentor. But their mentor had been in academia his entire career. And when he showed up, he just never understood some of the things you had just alluded to. Like, he could show up and do surgery, but that’s because patients basically just were been presented to him. He didn’t really understand the marketing aspect about it, or understanding that how to really translate academic practice into private practice because maybe he was an old dog he couldn’t learn new tricks, and they said it was really frustrating because they eventually had to let their mentor go, which was hard for them.
Michael: Yeah. It really, audience, this is really common of a challenge. My antennas go up whenever this scenario presents itself. And it’s not, I mean, hiring a senior doc to come join a practice is a pretty common scenario.
Brad: And there’s another challenge with this type of strategy, Michael talk or explain to our audience [00:24:00] a challenge that goes with an owner letting go of his actual caseload that he was so early in the story, he was tied into it that was important to him.
Michael: Yeah. I mean, letting go was tough. And for some physicians surgeons, their hands become their identity.
Brad: I know that story.
Michael: And so, it’s easy to say on paper I need more time. I need to hire someone to help give me relief. It’s much different to actually let go of the cases. And so you oftentimes will have problems where the new doc gets there and then they don’t have anything to do because there’s no cases coming that way because the doctor’s not letting go of them. But even if the senior doctor is kind of willing at this deep identity level to let go, there’s another kind of issue is that they may have some [00:25:00] control issues. So even if the senior physician’s good at what they’re doing, there’s no way they do things the same way as the hiring physician, in our case, Dr. Steve. And so, there’s a control pressure that will come in. Patient care or the patient experience is going to slip because no matter how good it is, they’re not me.
Brad: They’re not Dr. Steven.
Michael: They don’t communicate the way I do and love them the way I do. And so what that then again, puts pressure on is not being willing to let go or not willing to let go at the pace that’s needed to accomplish what they’re trying to accomplish.
Brad: Yeah. I think you were talking about this earlier in the story, and I want to go back to it real quick, which is an important element, which Dr. Steve was so motivated, but he wanted to do all the things himself. So he kept bringing on these younger doc, but you go figure it out yourself. Then he bought up another practice. But then, so his inability to basically, and we’ve talked about this in other shows, [00:26:00] fire himself, to again, try to do other things. And that’s really hard. I mean, I said I know that story because my dad being a retired surgeon, I mean, he always identified himself as an orthopedic surgeon, not an orthopedist, an orthopedic surgeon. And to your point, that’s their identity. And as you cut back on your case loads and fire yourself from different cases, that’s really difficult for a doctor or anyone who’s been really good at these professions. But in his case, it sounds like he was being pulled in so many different directions. that it again, being lack of time, I mean, still there’s only 24 hours in the day kind of situation, he had to find other ways to bring other people in. And to your last point, which is if he believed there was a better way to do it, that’s where a good internal educational and training aspects can help make sure that Dr. Steve felt like as he brought on other associates and even that senior physician, here’s how we do it at our practice. And really setting that tone, going back to that Lyman statement I had said kind of earlier, [00:27:00] but not that we have to end anytime soon, but I’m kind of excited. Tell me, we had a lot that would recount here, but what did happen with Dr. Steve?
Michael: Well, one thing, this put pressure on and the proof came through. Dr. Steve actually is an entrepreneur trapped in a doctor’s body
Brad: And so as it turns out, and I think part of him being a relationship collector, Dr. Steve was super committed to making this work. And I’d like to think that he had some good advice, but as realistically more Dr. Steve, and he was committed and his approach was to be really flexible with the senior doctor where he could be flexible for the business. He invested a ton of time, not just with himself, but with the staff to help make him welcome and part of it and to show him kind of the processes for the [00:28:00] practice and to try to make it a smooth transition. And it has gone fantastic. And Dr. Steve is spending more time on the business of his practice.
Brad: Is he still running?
Michael: Yes.
Brad: You don’t follow him with some app?
Michael: On Strava? No, Brad, I do not follow him on Strava, although I would not be surprised to learn that Dr. Steve is on Strava.
Brad: Sure. Now, and I think for audience members taking a big step back, some takeaways I had, Michael, as you were talking and reflecting on this, adding a new physician in general it’s difficult and especially obviously in this case during a scaling season, but it offers such significant opportunities for growth and improvement of patient care. But as you were taught in the story there are lots of different challenges that have to be managed that Dr. Steve was starting to recognize. And essentially, with time you’re adding something new service line, in this case partner, you really do have to slow down and think about weighing all these different pros and cons and carefully really consider, is [00:29:00] this new thing I’m adding, is this going to help my practice? Help me go where my goal is? And how does it that impact my team, my staffing? What else do I have to do? I thought Sacha when he was on with us, did a really good job explaining each one of those steps.
And then how does it deal with your current resources and your patient needs? Are they getting what they want? You won’t go back to fear that they weren’t doing the things correctly, or his way. And then bring on a new doctor, bring on senior your doctor, how are you going to market for those people? And then what does the market look like in that area to have brought on these individuals? Are you bringing on a procedure that no one else in the market is doing? And if not is that going to be something that’s be driven? So all those are things like, as you were telling me, all these different doctors from bringing on a young doctor to acquiring some doctor who’s retiring, bringing on a senior doctor, that’s an amazing ability for Dr. Steve to have develop this incredible scaling for our season. I’m glad you were able to share that, but we’re almost done. [00:30:00] So, Michael, some final thoughts.
Michael: I mentioned it earlier. There’s a big difference between an idea that’s on paper and actually doing it. It’s really easy when you’re on a run to dream it up and see it and think, wow, this is going to be fantastic. But actually doing it, you got to roll your sleeves up. And it’s not just you, in this case, Dr. Steve rolling his sleeves up, but your team. Do you have the team to help make this a successful scaling activity? In this case, adding a partner. And then when you’re adding a partner, you really have to have healthy, hard conversations when needed to look for alignment, to look for the areas that will be friction points with this person kind of trying to blend in to your practice.
Brad: Awesome. Well, Michael, next Wednesday we’ll have our partner and series regular, Jay Reyero, back with us for the final episode of this season when we discuss scaling by joint venturing. Thanks [00:31:00] again for joining us today. And remember, if you like this episode, please subscribe, make sure to give us a five star rating and share with your friends.
Michael: You can also sign up for the ByrdAdatto newsletter by going to our website at byrdadatto.com.
Outro: ByrdAdatto is providing this podcast as a public service. This podcast is for educational purposes only. This podcast does not constitute legal advice, nor does it establish an attorney-client relationship. Reference to any specific product or entity does not constitute an endorsement or recommendation by ByrdAdatto. The views expressed by guests are their own, and their appearance on the program does [00:31:00] not imply an endorsement of them or any entity they represent. Please consult with an attorney on your legal issues.
