The 'Dark Side' Of Joining A Group Private Practice (part 2)

Last week, I blogged about the benefits of joining a private practice group. Today, I'll discuss the downside of being in business with other practitioners. I briefly worked in a group practice where all therapists owned equal parts of an LLC (Limited Liability Company). At first it sounded like a good idea. After a while, I could see that it wouldn't work long-term for me and for my practice.

The Drawbacks of Joining a Group Practice

1) Liability concerns

After several months in a group practice, I realized that the drawbacks far outweighed the benefits. One of the biggest drawbacks was sharing liability for other mental health provider's actions and decisions, of which I ultimately had no control. Therapist Melissa J Templeton, MA, LPC, LMFT agrees, “It's really important to be aware of the legal entanglements of being in practice with another mental health provider, as it exposes you to all kinds of liability. Being in the same building even without a formal partnership agreement could open you up to being sued by someone who was injured on the property or who accuses your co-leaser of a criminal or civil action.”

Psychologist Wes Crenshaw PhD, ABPP of Family Psychological Services, LLC strongly cautions other therapists against creating legal partnerships in group therapy practice.

The best advice I ever received was to avoid creating a partnerships, and I ignored it. When one is say, a 25% owner of something, one is an owner of nothing. The only groups that work well this way are those with a clear 51% managing partner. Unfortunately, psychotherapy practices are not traditional businesses in the sense that they produce a profit above payroll sufficient to take distributions. They are instead a conduit by which money flows from the client/insurance company pockets into the provider. Without the attributes of a normal business (e.g. a profit margin above salary) there is no good reason to form a fiduciary obligation with other providers.

2) Loss of autonomy

When I joined a group I realized that the decision making process, even for minimal office expenses, was extremely inefficient. It was frustrating and even painful for me. I like see things change and move forward quickly. Since everyone owned equal shares no one was really "in charge" and able to make quick decisions, or to create a cohesive vision, or to take the lead of the group.

Arizona psychologist Christina G. Hibbert, Psy.D. was employed by a group practice but now is in solo private practice. Of her group experience Hibbert says, "Sure it’s great to have less responsibility but that also usually means having less input into decisions regarding everything from office décor to how things run." Illinois counselor Melanie Dillon, LCPC, at Center For Wellness, Inc also notes that a drawback of a group practice is the loss of say "over who I counseled and what my hours would be.”

3) Less control over income

Like Dr. Crenshaw warned, when you're legally partnered with others they have a say in business decisions that affect your income. When you're part of a group, others may have already dictate the cost of joining the partnership, or the amount you'll be paid when employed by a group practice. “I had put off joining a group practice because of the dramatic decrease in hourly income," Dillon adds.

When I was in a practice group with five other therapist I was contributing 1/5 of the overhead even though I was practicing part-time.  I quickly realized that, although I enjoyed working with other therapists, I could run a solo practice for a lot less that I was paying to be a part of the group. I decided to venture out on my own and started Wasatch Family Therapy.

Since then, I have built my solo private practice into a private clinic with a dozen employees. I am the sole owner and can make decisions quickly. In upcoming articles I'll walk through the pros and cons of going into solo private practice.

Based on your experience, what are the drawbacks of being in a group private practice?

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Pros And Cons Of Group Practice (part 1)

A common private practice question is whether a therapist should join a group practice or venture out on their own as a solo practitioner. The answer is different for everyone depending on your strengths, goals, personality, financial needs, and many other factors.

There are also other options in between solo and group practice, like sharing an office space with other practitioners while maintaining your own practice. "There are numerous ways of forming a group practice including cost/office sharing, partnership, and employment as associates under a licensed provider," according to Kansas Psychologist Wes Crenshaw PhD, ABPP of Family Psychological Services, LLC.

To help make your decision easier, here are some of the benefits and drawbacks of joining a private practice group.

Benefits Of Joining A Group Practice

1) Established business systems

If you're considering joining an established practice, a huge benefit is that they already have office systems in place to support the practice. Michigan therapist Jacquelyn J. Tobey, MA, LLP of  Sollars and Associates says, “I have benefited from joining a group because many of the business practices such as marketing and billing are already established.”

2) Shared expenses and responsibilities

Sharing the costs of operating a business can be appealing. Therapists often underestimate the financial requirements when starting a private practice. Sharing operating costs, office space, equipment, marketing, and administrative expenses are just some of the benefits that North Carolina counselor Erika Myers, LPC enjoys about group practice.

Tobey has learned what it takes to run a business by first joining a group practice. She likens a group practice to renting a furnished room in a house that is already built, whereas private solo practice is more like  designing and building the house on your own. I think that is an excellent analogy.

3) Consultation and camaraderie

Meyers enjoys having colleagues to consult with on difficult cases as well as the camaraderie inherent in interacting regularly with colleagues. "The work we do can be isolating, so having fellow professionals around can help you have more social contacts beyond the professional consultation," Meyers says.

Melissa J Templeton, MA, LPC, LMFT compares working in a group setting to a good relationship. “Like a good marriage, it is the ‘fit’ of the various personalities that determines whether the cohabitation is going to work and work well,” shares Templeton.

4) Referral sources

Illinois counselor Melanie Dillon, LCPC, at Center For Wellness, Inc values the internal referrals generated within her multidisciplinary practice.

My business partners are both chiropractors. One provides acupuncture/Chinese medicine and the other chiropractic care/sports medicine. We have also employed a massage therapist. This way we have created a system that supports internal referrals. The other benefit is that all expenses are now shared, and that my income is no longer dependent on how many clients I see, but on the group as a whole.

Now that you have a feel for the benefits of joining a private practice group, check back later this week for part 2 - the drawbacks of group practice.

(c) Can Stock Photo From your experience, what are the benefits of joining a private practice group?

[Video] Peek Inside A Therapy Office With A Modern Vibe

Thanks to Rhett Smith, LMFT of Auxano Counseling in Plano, Texas for submitting this fun virtual office tour. I am definitely stealing the idea to mount Lexan plastic on the wall for genograms and illustrations - brilliant! Also, love the symbolic tree painting and that chunky rug. Very clean, light and inviting office space.

Find out more about Rhett Smith's therapy practice at rhettsmithcounseling.com

If you’re interested in submitting a YouTube virtual office tour video get details here.

Adventures In Private Practice: Pastoral Counselor Rev. Christopher L. Smith, LMHC

The Reverend Christopher L. Smith combines his spiritual insight as an ordained minister in the Presbyterian Church with impressive mental health and marriage and family therapy training in his New York City private practice Seeking Shalom.

Christopher offers a variety of mental health, EAP, and consultation services with the overarching theme of helping clients and professionals seek peace in their life. See how Christopher balances his ministry and private practice.

Why did you decide to open a private practice? As someone who has been gifted in different ways and who enjoys the peace that comes from balancing different interests, I was interested in working on a part-time basis and to preserve some degree of flexibility.  The easiest way to do this while being able to maintain control over the way I would practice in helping others was to formalize my own practice.

Formalizing a practice in the same building that I also serve as a pastor both added a degree of efficiency in my work as well as adding to the quality care in a community (Harlem and Washington Heights) that was lacking in some of the services that I offer.

Clients that therapists find to be the most "difficult" are sometimes the ones who can teach them the most. What have you learned from your toughest clients? "Difficult" clients come in a variety of forms.  Difficult clients with complex symptoms motivated me to seek training, consultation and supervision in new areas strengthening the breadth of my knowledge and abilities.  Clients that are difficult in terms of their methods of interacting with people (especially those who are working on or need to work on personality disorders) strengthen my own interpersonal skills, especially around boundaries and providing clear expectations, which then makes me better able to work with a wider range of individuals.

Clients that are difficult because their situation touches on personal issues help me both develop better boundaries (remaining focused on the client and not working on my issues through the work with the client) and to learn of areas that I need to work on for myself in other ways.  Then there are those difficult clients that have helped me learn my limits whose tough issues had to lead to the end of the therapeutic relationship in order to protect my own physical safety.

What's your biggest pet peeve about private practice? My biggest pet peeve is the way that economies of scale cannot be reached in private practice, especially on a part-time basis.  This is exacerbated in my case, as New York requires me to practice through two professional corporations as I am licensed in two mental health professions that are not allowed to be practiced in the same professional corporation.

How did you discover or develop your practice "niche"? I was fortunate that my "niche" is what led me into being a mental health professional.  My motivation began within counseling and pastoral care work within the seminary building on other experiences that made this calling evident to me. While my career has involved practicing outside my "niche", there was no question that pastoral counseling would be the focus of my own practice.

What resource (book, website, person) helped you the most when setting up your private private? There was not one resource that most helped me while setting up my private practice.  My original private practice was small to help maintain my skills and was possible because of the support of a number of pastors.  In developing a larger (but still part-time) practice that is more formalized, a wide variety of resources were helpful.  Probably most critical, though, was the encouragement and faith of a number of people in my relationship circles.

What has surprised you most about being in private practice? The largest surprise has been that the clients that have been attracted to my practice have almost exclusively been ones within the area of my niche.  Prior to moving in this direction, most colleagues have talked about needing to start out with a broad base of clients to make their practices work.

Has your private practice helped you grow professionally? How so? Being in private practice has forced me to become much clearer and to be able to more concisely describe what I do professionally.  This clarity is clear professional growth.

Has it helped you grow personally, too? How so? Being in private practice the way that I am has helped in my overall balance.

Being a therapist can be emotionally exhausting. What do you do to care for your own emotional and psychological health? While I care for my emotional and psychological health in the standard ways (such as meditation, walking, music and friends) that are the case for other therapists whether they are in private practice or practicing in a different form.  As my practice is in the same building as another role, I do not have to see large blocks of clients without breaks.  I am able to see clients for a little while, then go down to my other office and do something different as a respite before coming back to work with another client or two.  Additionally, I take time each week to be out of town.  While away, I am engaged in another role but it also tends to provide sort of a weekly mini-retreat.

How do you cope with the inevitable stressors involved with being your own boss? These stressors are not things that I cope with as they are positive stressors for me.   Rather than coping with them, I enjoy the challenges and exploration of the possibilities.

What personal strengths have helped you succeed in private practice? Patience, self confidence, motivation, my own spiritual understandings of vocation and social networks are probably the personal strengths that have most helped me to succeed in private practice.

To learn more about Rev. Christopher L. Smith, LMHC visit SeekingShalom.org

Multiple Income Streams Soothe Therapist's Financial Anxiety (part 1)

Relying solely on direct clinical hours may leave private practitioners financially vulnerable to income instability. Since client hours in private practice can vary greatly depending on the time of year, state of the economy, number of new referrals, and several other factors, developing multiple income streams can help you to create a more stable income. "By having the other income streams in place, I have been able to be less susceptible to the ebbs and flows that occur in private practice during difficult economic times," says The Rev. Christopher L. Smith, LCAC, LMHC, LMFT. In addition to providing income stability, diversifying your professional activities with multiple income streams allows therapists to explore a variety of interests, to express creativity, and to get paid for their passions.

In addition to clinical hours, I own and serve as clinical director of a private therapy clinic where I oversee and supervise 10 therapists, write for PsychCentral and other publications, work as a relationship and emotional health media contributor, do public speaking, provide consultation to therapists building a private practice, and I'm currently writing my first book.  Curious about what other private practitioners are doing to add to income stability I reached out to several successful colleagues to see what additional income streams they've developed. Here's a sampling of what other therapists are doing to diversify their professional life and achieve greater income stability.

Write and publish a book

Many therapists have taken their clinical expertise and turned it into a book. For example, Frank J. Sileo, PhD has  written three children's books, including Bug Bites and Campfires: A Story for Kids about Homesickness (Health Press, 2009). Clinical Psychologist Dr. John Duffy took his passion for parenting and authored a book The Available Parent: Radical Optimism For Raising Teens and Tweens (Viva Editions, 2011). What areas of expertise could you write about?

Write for print publications

Supplementing clinical work, Terrie Browning, LPC, CFC, DCC writes for a column "My Healthy Mind" for a local magazine My Metro You. Not only does it provide additional revenue but she says it's also personally fulfilling. Of writing for publications she says, "Writing allows me to share knowledge on topics that are a concern for many people and offers a way for me to network myself."  Therapist Karen R. Koenig, LCSW, M.Ed. has successfully written for professional publications including Social Work Focus, Social Work Today, Addiction Treatment Forum, and The Newsletter for the Society for Family Therapy and Research, adding an additional income stream.

Create a therapeutic product

Have you considered creating and selling a product based on your clinical expertise? Stephanie Ann Adams, M.A., LPC of Beginnings Counseling & Consulting, created a hybrid counseling/video series for premarital counseling through Twogether in Texas. To help families deal with the stress of relocation Jill Kristal, President of Transitional Learning Curves, developed a game and book series called 'Our Move'.

Develop a professional online network

The internet allows for many options for therapists to create passive income through membership sites. In addition to writing a local magazine column and providing clinical work, Browning, with the help of her adult children, developed a professional wellness center online called Experts Now. This online center offers wellness experts an avenue to offer services and sell products for a commission creating additional income for Browning.

Contract as a consultant

Consider asking yourself, "Which companies or organizations may want to tap into your areas of expertise?" Therapist Dr. Mario Kirk, LPC, Director, A Blessed Child, LLC, performs psychological testing for local attorneys and schools. Women's reproductive health specialist Pec Indman EdD, MFT consults and trains for county health programs and for the US Federal government.

Are you developing multiple streams of income to supplement your direct care hours? Please share your ideas in a comment below.

Watch for multiple income streams part 2 later this week!