PART 2 OF 4: The Paths a Succession Can Take

The main ways to hand a practice forward.

Succession is not one path but several, and the right one depends on the practice, the owner's goals, and who's available to take over. Understanding your options lets you as an owner choose the route that best serves their aims. This part examines the main succession paths.

Internal succession to a partner or associate

Many owners transition the practice to either an existing partner or a groomed associate. This path helps with continuity for patients and staff and a known, trusted successor, although it requires developing that successor over time and structuring a buy-in or buyout they can fund. It is often the smoothest path when a suitable internal candidate exists.

Sale to an outside buyer

An owner may sell to an outside provider or group.

This can maximize value and suit an owner without an internal successor, but it requires: preparing the practice for sale, finding an eligible buyer, and managing a transition to new ownership. The sale process itself is substantial and will definitely benefit from early preparation.

Sale to an investor-backed platform

Increasingly often, owners sell to investor-backed groups or platforms. Although this can offer attractive value and relief from management, it involves structures that must comply with California's ownership rules and often ties the owner to a continuing role and future performance. It warrants careful evaluation of both terms and structure.

Merging with another practice

Some owners transition by merging into a larger practice, gaining scale and a built-in succession while stepping back over time. This path blends elements of a sale and a partnership and carries the structural and governance considerations of both.

Winding down

Where no successor or buyer is available or desired, an owner may wind the practice down in an orderly way. Even this path requires planning, to handle patient records and notification, staff, obligations, and the proper closure of the entity, in a manner that meets legal requirements and protects the owner.

How West Coast Health Law Can Help

We help owners evaluate the succession paths available to them, from internal transition to sale, merger, or wind-down, and choose the one that fits their goals.

West Coast Health Law offers a FREE consultation which you may schedule by clicking the button on our website.

This article is provided for general informational purposes only and does not constitute legal advice or create an attorney-client relationship. Laws change and every practice is different; consult a qualified attorney about your specific circumstances.