Buying into a medical practice: key legal and financial checks for physicians
Practice ownership and growthSummary for practice owners
Dennis Hirs discusses the legal and financial questions physicians should work through before buying into a practice. The interview presents partnership as potentially valuable, while stressing that the documents determine whether ownership brings meaningful economics and governance. For an incoming OB-GYN partner, the key diligence areas include how the purchase price is calculated, what assets or receivables are included, whether existing liabilities are shared, and what voting rights accompany the shares. The guest describes differences between book value and fair market value approaches and urges physicians to understand the methodology instead of accepting a number without context. He also recommends reviewing the shareholders’ agreement early, including how future buyouts will
work, how shares may be paid for over time, and whether classes of ownership have different rights. A practice’s debt deserves attention: the discussion gives an example of borrowing to maintain distributions, which could leave a new shareholder carrying obligations that were not obvious from the offer itself. The interview also notes that a nominal buy-in price can mask weak participation in decisions or profits. For current owners, the discussion doubles as a reminder to make partnership pathways clear and consistent, helping new physicians understand both opportunity and responsibility. This is general orientation from an attorney, not a substitute for transaction-specific review. Its strongest practical lesson is to obtain financial records and governing documents before signing, then have experienced counsel explain the economics, liabilities, exit terms, and actual influence attached to ownership.
Owner takeaways
- 2:12 Clarify the partnership criteria and purchase method before an employee reaches the point of signing.
- 3:51 A buy-in price should be understood in context, including the assets and value represented by the practice.
- 5:23 Establish which receivables belong to existing owners and which are shared after admission.
- 8:00 Verify that ownership includes meaningful economic participation and governance rights.
- 13:15 Review debt and financial statements so inherited obligations are visible before becoming a shareholder.
Why it made the list
Included for its concrete legal and financial buy-in checklist, with 432 views.
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This video is published by Kevin Pho, MD on YouTube. Obstetricians.com is not affiliated with the creator, and inclusion is not an endorsement by either party. Watch it on YouTube.