As A Medical Practice, What Agreements Do You Really Need a Lawyer to Draft?

When starting or managing a medical practice in Australia, there are a variety of agreements that must be drafted to ensure the practice is legally protected. While there are several websites that provide downloadable templates of legal agreements, forms and documents, there are certain agreements that should always be drafted by a lawyer to ensure they meet legal requirements and protect the practice’s interests.

Risk Management

Risk is quite simply exposure to danger, harm or loss. This doesn’t strictly mean financial risks such as loss of income, profit or property, but also damage to the reputation or goodwill of your business.

To identify what agreements you really need, it is essential to evaluate where the areas of greatest risk are in your practice. These risks are likely dependent on your unique practice. Therefore, by understanding the specific risks your practice may face, you can prioritise the agreements that need to be in place to mitigate, manage or transfer those risks.

What Are The Primary Risks Commonly Faced By Medical Practices?

Staff are essential to grow and retain a business. However, they also pose one of the most significant risks as they can impact various aspects of the business's operations and reputation. Subsequently, having well-drafted employment agreements that outline the terms and conditions of employment is absolutely critical to protect both yourself as the employer and the employee.

Medical practices are well known for being service businesses that doctors contract to work from as well, so Service Agreements with doctors (including the owners of the practice) are critical in protecting your business. Recent clarifications in the law following the Thomas & Naaz Case have also highlighted the importance of accurately capturing the arrangement you have with independent medical contractors to safeguard your medical practice against any potential liabilities associated with payroll tax and other exposure for employee liabilities that you may not have budgeted for. You can read more about the impacts of this case here.

Policies and Procedures such as a Delegation of Authority Policy are also vital in mitigating risks associated with employees. While legal expertise may not always be necessary to draft these policies, they play a crucial role in establishing clear guidelines and areas of responsibility for staff members. By ensuring transparency and accountability, these policies and procedures promote a harmonious work environment and minimise potential risks that may arise from ambiguity or miscommunication.

Another risk encountered by many businesses pertains to the relationship between its owners. Implementing expertly structured owner's agreements tailored to your specific business structure, proactively address potential conflicts and establish clear guidelines in advance. These agreements, such as Partnership Agreements, Shareholder’s Agreements, Unit Holders Agreements or Equity Holders Agreements, aim to not only avert disputes but also create a framework for addressing and resolving disputes through a predetermined step-by-step process.

What Are Some Risks I May Not Have Considered?

The growing online presence of modern medical practices may mean an updated Privacy Policy and Website Terms and Conditions are required. The Policy and Terms play a crucial role in ensuring compliance with Australian privacy laws and protecting the privacy of patients. As businesses evolve, it is advisable to review and update these documents to reflect any changes within the practice. For instance, if the practice begins selling products online or collaborates with online platforms such as HotDoc or Heidi, an update of such policies becomes essential.

Can I Use Templates Offered By Professional Associations?

When considering the use of templates provided by professional associations such as the Australian Medical Association (AMA) and the Australian Association of Practice Management (AAPM), it is important to be aware that these templates are typically designed to cater to a broad range of practices, often representing the lowest common denominator. There is no ‘one-size-fits-all’ solution, as the suitability of a template will depend on various factors, including the specific template itself and the unique characteristics of your practice.

While these templates can be a useful starting point, it is essential to proceed with caution. If your practice operates in a traditional manner adhering closely to standard practices, these templates may likely provide sufficient coverage. However, if your practice deviates from this, it may be necessary to seek a more tailored and bespoke solution with the assistance of a lawyer.

In our experience in working with over 1,000 medical practices over the past few years, every single practice has distinctive aspects. So accordingly, we would caution any medical practice owner or practice manager from solely relying on a template with no associated professional advice. In our view, the risks are not worth taking on.

Can I Download Agreements From The Internet?

Downloading agreements from the internet or copying agreements from peers carries significant risks. As each business is unique, relying on generic templates obtained online or from others may result in agreements that fail to adequately address your practices’ specific needs and requirements. As mentioned above, medical practices do not run as cookie-cutter businesses, there are always variations in the way things are done.

Additionally, there is a potential risk of infringing upon another party’s copyright. Many agreements available on the internet or shared by peers are protected by copyright, and reproducing them without proper authorisation can lead to legal consequences. To ensure legal compliance and to tailor agreements to your particular circumstances, it is advisable to seek professional advice who can provide customised and legally sound agreements.

Leverage An Expert

Whether you are a new or existing medical practice, it is important to understand that certain agreements and policies are not only legally required but also aim to mitigate risk in your practice. Seeking professional advice is highly recommended, as experts can provide new ideas, best practices and accountability.

There are some non-lawyers who also hold themselves out as being able to draft legal contracts. Be aware that if you are having agreements drafted by non-lawyers, they may not afford you the protections that a legitimate lawyer will.

You Legal can provide legal advice on all aspects of commercial agreements and also provide you with agreements for everyday use that suit your business. To discuss this further, contact our team here, and we will put you in touch with the best professional for your needs.

Interested in purchasing an Employment Agreement or Shareholder’s Agreement for your practice? You can find our fast-track solutions here.

This blog article is for general guidance only. Legal advice should be taken in relation to taking action on specific issues.