Practice owners looking to retire have many pathways to consider. They could sell their practice to an associate or corporation. Or they could stay on part time.
One expert advised that if owners want to close their practice, doing so is no small matter.
There are complex legal, ethical, and financial considerations too important to leave until the last minute, according to Dr. Charlotte Lacroix, owner of Veterinary Business Advisors Inc., a national consulting firm that advises veterinarians and attorneys on veterinary business and legal issues.
“It’s not just about putting an out-of-business sign on the door and walking away,” Dr. Lacroix said. “You have a professional obligation to your clients and patients.”
Dr. Lacroix spoke on Jan. 14 during the Veterinary Meeting and Expo in Orlando, Florida, about the ethical and legal steps required of owners closing a veterinary practice.
Owner requirements are described in the state veterinary practice act and regulations, which, Dr. Lacroix said, are conveniently located on the American Association of Veterinary State Boards website. She also suggested contacting the state VMA, which may have resources explaining the requirements.
Once owners have decided to close their practice, they need to set the process in motion at once, Dr. Lacroix said. There are staff members, clients, and vendors to inform; pharmaceuticals and equipment to dispose of; debts to collect; and notices to post in the local newspaper as is required by many state veterinary practice acts.
Dr. Lacroix acknowledged the risk that staff members who aren’t under contract may leave while the practice still needs them. “You don't want staff leaving before you’re ready, but you’re going to need to bring them in and say, ‘OK, this is the methodology we're going to follow, and this is how we're going to tell clients,’ and so on,” she said.
Dr. Lacroix noted that most contracts with staff members include an out clause whereby either party can terminate the agreement at any time for any or no reason so long as advance notice is given. “Just because you have a contract, that doesn't mean people can’t come together and agree to terminating the contract early,” she said.
Owners need to review vendor contracts and leases to ensure closing the practice doesn’t violate the terms of an agreement. “If you signed a five-year contract and you want retire at three years, let there be no mistake: These companies will sue you,” she warned.
State practice acts have a lot to say about medical records, according to Dr. Lacroix, who advised owners to keep copies of medical records in case they’re sued by a former client years down the road. “Those records are your property. They're not the property of the pet owner,” she said. “The owner is entitled to a copy, but it’s your property, just like the equipment that's in your practice.”
Owners will also need to consult with their insurance brokers regarding closing out property insurance, staff health care, and other polices related to the practice, Dr. Lacroix said.