I am selling my practice and the buyer wants to use keep my name on the signage and in advertising for the next few years. Should I allow this?
First, even though this question came through a client we are working with on the sale, but I thought it made for a good listserv question, it is imperative you work with a healthcare attorney for any sale or purchase of a practice. Second, a request from a potential buyer for continuity in the seller's presence at the practice is standard. The goodwill being transferred and paid for in a purchase is intrinsically tied to the name/reputation of the selling practitioner. As a direct ramification of the preceding sentence, use of name is a regular deal point negotiated upon sale/purchase of a practice. Concerns related to use of name post-closing are legitimate. I recommend that if you, as seller, are not staying on as a treating provider during a transition period, that any use of your name be properly identified as "formerly the practice of Dr. O." Do not authorize continued use of your name post-closing indicating you are still at the practice. Doing so would be a misrepresentation to your patients and the world of your involvement and may give rise to your association and involvement in potential exposure, i.e., potential malpractice matter should one arise....
Typically, as part of deal terms the parties will work together and approve a transition letter to the patients notifying of the change in ownership. I recommend use of such a device to assist in transition and also break the news that you, as seller, will not be involved or have limited involvement, as the case may be, in the practice after the designated closing date.
Questions on practice transfers or transitions? Contact Jennifer
to discuss atJennifer@Kirschenbaumesq.com
or 516 747 6700 x. 302.