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Episode 170 | 3 Mistakes in Partnerships with Michelle Mullaley and Erika Shilling

Episode 170  | 3 Mistakes in Partnerships with Michelle Mullaley and Erika Shilling

WITH Michelle Mullaley and Erika Shilling

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Hey Group Practice listeners! In this episode, I’m talking with Michelle Mullaley and Erika Shilling who are going to share their top three mistakes they see from group practice owners who are trying to set up a partnership. 

In this episode we cover:

  • Having a standard operating agreement
  • Determining leadership styles
  • Staff management & decision making as a partnership
  • Partnership building

This episode is sponsored by TherapyNotes. TherapyNotes is an EHR software that helps behavioral health professionals manage their practice with confidence and efficiency. I use TherapyNotes in my own group practice and love its amazing support team, billing features, and scheduling capabilities. It serves us well as a large group practice owner.

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Transcript:

Maureen Werrbach

Maureen Werrbach  

Hey, everyone, welcome to another episode of The Group Practice Exchange podcast. Today I have Michelle Mullaley and Erica Schilling on. For those of you who don’t know them, they own, of course, a counseling practice just like all of us; Bridges Therapy and Wellness Center. Did I say that right? And they’re gonna be talking today about partnerships.  I know so many of you in our membership and on the website, and Facebook asked about partnerships. And obviously, that is not a strong suit of mine, because it’s just me owning my practice. And so I’m really excited to have them on today to just share their top three mistakes they see from group practice owners who are trying to set up a partnership. Although I’m sure there’s 100s of issues that can come up, these are gonna be their top three. So how you guys, how are you?

Erika Shilling  

Great, good. Thank you for having us. Excited to be here.

Maureen Werrbach  

Yeah. So why don’t you get started with just telling people who you are, and how you guys formed your partnership? Or what went behind maybe the decision making of doing x? I feel like it’s like a marriage. It’s a pretty big deal. To do it.

Erika Shilling  

Absolutely. So I’m Erica Schilling. This is Michelle Mullaley. And we actually met when we were working at a group practice together. Michelle had been there for about seven years, and I was there for five years. So we had a really good understanding of, you know, of course, knowing each other and being friends, but also really how each other worked, what our specialties were, what our you know, strains, values, methodologies, those kinds of things. We had somewhat of an understanding of those things, and really wanted to be able to kind of shape our own destiny. The practice that we were at had, you know, owners, there was a more of a medical model different than than what we had envisioned and wanted to do. So we took time to really, you know, spend together and think through what this would be like, and we opened Bridges Therapy and Wellness Center eight years ago. And we started with just the two of us, build out a larger office space, but knew we wanted a group practice. We knew we didn’t want to be individual practitioners, we wanted to have that group feel. So we now have two locations. And we’re up to about 21 people and really have enjoyed the journey ups and downs and and can speak to a lot about partnership for sure. And learning along the way.

Maureen Werrbach  

I’m really excited to hear what you guys feel like are the biggest obstacles or problem areas that people face when thinking about it. What’s your not your top one–save the top one for last. Whatever you think is the biggest of your three, like holy moly, this is very problematic, leave that to the end. What’s one of the things that you guys see, when you’re working with other people that want to form partnerships as like big red flags?

Erika Shilling  

Yeah, no, I think you’re right.

Michelle Mullaley  

Yeah. So it almost was kind of working backwards a little bit you likened the partnership to a marriage, and we absolutely have had that dialogue many times. And so one of the things you don’t normally do in a marriage, but you really should do in a partnership, and I think it’s problematic, is when people fail to have a really solid operating agreement and a partnership agreement, like what is that going to look like? Who is going to do what, what is the exit strategy? If somebody passes away, God forbid, or if somebody decides this isn’t the field for them or wants to move to another country? How do you dissolve or separate or exit in a way that protects the business and protects both partners as well as clarifying other, so many things, right? So work expectations. Are you both committing 100% of your time and effort into the business? What if someone wants to open a second side business? Like how is that going to affect the energy that goes into the business? And should that affect compensation and the roles that are going to take place? How are you going to compensate? There’s just so many details to work out above and beyond running the practice, but how that partnership is going to be organized, that really can create some huge difficulties when unexpected things come up, if you don’t have that spelled out.

Maureen Werrbach  

I was just thinking, as you were talking about partnerships that might be between someone who’s clinical and someone who’s not. And you know, in the clinical sense, any clinical work we do is where income is received, but the non clinical work there isn’t. And so I’m wondering, you know, how that can also be extra beneficial. And having something written up in terms of like, the value that each person in the partnership brings in so there, it doesn’t become resentment that one is either doing more clinical work and bringing in clients, while the other one isn’t.

Michelle Mullaley  

That’s a huge point, because it won’t, you know, we did put into our partnership, if there’s a discrepancy and kind of work effort, as evidenced by revenues that are, you know, past a certain point that we need to re discuss why that is, and if we do want to make changes. You know, there was a time when Erika was doing far more management than I and so we wanted to make sure that there was some compensation for that. And other times when we talked about like somebody who’s, maybe I was bringing in more folks, because marketing and networking was my part, my role. And so that has a value. But is that a value that should get compensated differently than someone who’s doing all the books? Which obviously, you need the numbers too. So, yeah, feeling, sorting out the relative value kind of, of everything we do. Some of it is revenue generating, and some of it is not but absolutely critical to our success.

Erika Shilling  

Yeah, I would agree. And I think for a lot of people, they may define it as what we’re partners. So it’s all in a mix, we got advice early on, if you guys open a partnership, you’ve just got to think about it as, but everything is each other’s. And so it really does depend on, I think it speaks to what you’re talking about is having that communication and setting up that agreement, just as an understanding in the beginning of what’s unique to those partners that are setting up the practice. I think we can find, and we did this in the beginning, you can find a lot of generic operating agreements out there. But they don’t necessarily speak to your own unique selves and the partnership that you’re forming. And a lot of them do have in terms of like the death of a partner, but they don’t have an exit strategy of when you’re just ready to leave. What does that look like?

Michelle Mullaley  

Well, even in our, in ours, we both have spouses. And, you know, we don’t feel like somebody who is not at all associated with our fields should have half the business, right? And so that’s part of, that’s spelled out what happens then, and we even have life insurance on each other to make sure that we protect the business in the absence of one of us due to death. And like, it’s yuck stuff to talk about, right? It’s kind of like doing that prenup when you don’t want to talk about the dissolution of a marriage, when you’re so excited about joining it. But if you don’t have it, you know, it just doesn’t protect the business or either of you. Right? 

Maureen Werrbach  

I think that, you know, it definitely can lead to resentment and not realizing what expectations might come up for you as time goes. But if you set this up from the beginning, and maybe have an attorney that’s helping you kind of crafted this, they’re gonna bring up questions that you might not even be thinking of, of like, Oh, yeah, I would expect my business partner to be doing X, Y, and Z. I didn’t even think about that. And through writing this out, you hopefully get most of those, you know, T’s crossed and I’s dotted? Yeah, yeah. Do you guys recommend just using a regular business attorney to help you craft that? For those thinking about that, and not using a general template? online?

Erika Shilling  

I would say that’s pretty key is to see even from the beginning, if you can find a great business attorney that you feel really comfortable with, and be able to establish that relationship going forward. It’s such a huge support to be able to have from the beginning would would really have been ideal.

Maureen Werrbach  

I feel like you know, you’ve been around just slightly less than I have group practice wise. And back then, there was not that many resources out there to know what to do. Like, you just didn’t know what you didn’t know until it like either hit you in the face or something happened. I feel like this is the great thing about you know, nowadays with all of this stuff at our fingertips is we can learn so much from people who are doing that work, who maybe made those mistakes early on, so that those new practice owners are making the same ones. Okay, so first one, have an Standard Operating Agreement. Have a contract or some kind of a document that outlines the roles that each partner is going to play? And what happens if dot dot dot. That’s the first one?

Michelle Mullaley  

Yep. That’s the first one. And, yeah, and that kinda leads right into…

Erika Shilling  

Yeah. The second one, I think, you know, for us that that we think easily about is, well, really all three of them have the theme of difficult communication and having some of those difficult talks. And really to be able to figure out in the operating agreement, kind of who may do what role or or, you know, what part of the business to oversee that second mistake is not having conversations about what are your leadership styles? And what are your strengths and weaknesses. To really spend that time even individually and together, talking about what are your strengths and owning some of the weaknesses, owning some of our own areas of insecurity, so that they don’t, you know, kind of bubble up in ways that really affect the the communication in the partnership. Knowing  our strengths and weaknesses, I think does tell us about our leadership style. And in the beginning, you’re just so excited to get started or, you know, so ready to look forward? It’s not always so easy to take that time to say, well, how might I, you know, really want this practice run? Or how have I been a leader in the past? 

Michelle Mullaley  

Or how are we going to make decisions? Like, we just assumed that we had the same vision, we have the same mission, so we would always align.

Maureen Werrbach  

That’s the issue, though, in the beginning of anything, even a relationship, you tend to agree more with what your partner says, and what your partner wants to do in any beginning of any type of relationship tends to be more agreeable. And so I can see with time that–and I really, I truly think that most business owners don’t focus on their own leadership growth, because it doesn’t have like a tangible value to it. And so when we’re starting a business, we’re thinking of like, how do we get therapists? How do we get clients to come in? How do we make sure that insurance or clients are paying their portion so that our staff can get paid is all the like, the things that in a literal sense, keep a business up and running? But they’re not prioritizing that leadership piece of what am I good at that I’m going to bring to the table in our partnership? What are you good at that I’m not good at, that you can bring to the table as a in this partnership?  I have a question: staff management? Because obviously, I don’t have a partnership. So I just, if anything, if someone doesn’t want to do something on my leadership team at all, it always comes back to me. Who is there one person that deals with staff management, like the firing, the letting go the performance improvement plans? Or is that something like that, you guys have to argue on who’s going to do this one. That’s how I envisioned it is I’d be like you, you need to be the one that fires and lets go of  people, and I’ll do x and y.

Erika Shilling  

In a dirty laundry, it is actually something we do together. And I think we then feel that support from one another so that no one person really does have to have that difficult conversation. And we really want in the group practice, we want that cohesive feel. So I think people see us, almost, you know, sometimes there’s one entity, but they know our different strengths. But usually, when we do reviews with people, you will have those conversations together. 

Michelle Mullaley  

And hiring and firing kind of are the things we feel like are really important that are done as a unit. Yeah.

Erika Shilling  

But we do have, you know, certain clinicals that we have a clinical director, and then we sometimes have some of the clinical staff that we each supervise. So if someone’s you know, needing additional supervision or performance plan that may fall into one of us more than the other.

Maureen Werrbach  

So what is your suggestion for, like allocating, because what I’m finding with my own leadership team is that we all make decisions together, which creates this may it causes I should say, creates a causes this side effect of all decisions take a really long time to be made because everyone has to agree. And when not everyone agrees like then what type of thing and so obviously, at the end of the day I can I can still just make a decision, because I’m the only one that owns it. But I really come from this frame of mind where we’re you know, making decisions as a team leadership team, but how it can either, you can either talk from it, from how it works for you guys, but also just because I know there’s other partnerships that are different where they maybe really do have allocated like this is what I do. I do the finance piece, you’re going to do the staff management piece. I’m going to do the this piece and then you know one person of the partnership really owns the decision making on their little piece. They obviously maybe come together and say, this is what I’m thinking based off of my, you know, research on this topic. But like, I don’t know. So that was the longest winded question. But I feel like I am like all caught up in the minutiae of that, how to if you’re, if you–how does it work if you decide to do what you’re doing, which is everything kind of gets done mainly together? 

Erika Shilling  

We actually don’t do everything together, it is a little bit more like what you described. But we so we, at one point, worked with a consultant who was very helpful for us, because that was a challenge in being able to make those decisions. And what happens if we disagree, one of the reasons why I really wanted to work with Michelle was she and I are very different. And, there’s a richness in that we really challenge each other. But it also means we really bring different perspectives and ideas and skills to the table. So we don’t always agree. And that process, I think, in the end, when we get through, it really comes out with a fantastic outcome. The consultant was really helpful for us to be able to identify what our strengths and weaknesses are. And how does that align them with roles that we need to take on and separate from one another. So there’s this kind of five column, if you can picture on one end would be decisions that I make, on the other end, or decisions that Michelle makes. And those are our own independent roles. Yep. And then we have decisions that I make with Michelle’s input decisions she makes with my input. And then we have a column of decisions we make together. So as she was saying, for hiring and firing, that’s a column, you know, that was in the middle, really something that we want to make sure we do that together. But we definitely have our own lanes. Yeah. Yeah,

Maureen Werrbach  

I love that visualization. I hope everyone who’s listening cuz I’m seeing your hands, which also helps in this, but this look kind of like a–

Michelle Mullaley  

Kind of a, we call it like a route management rubric. And so we actually opened last year Bridges Therapy and sorry, Bridges Consulting, to try to share some of what we’ve learned in this in terms of how to help partners to find where they fall in those lanes, and what should be shared decisions, what should be independent decisions? And so it’s one of the tools that we use in our consulting.

Maureen Werrbach  

Yeah, it’s such a great visualization for figuring out, you know, is this something that I’m supposed to be making a decision at or something we should be making a decision, and I really love and that the fact that there’s like 5 different areas, the ones where you each independently are making those decisions. The ones where one is kind of the primary, maybe decider, but they loop the other person in, and then one where it’s really a collaborative decision.

Michelle Mullaley  

Yeah, right. It just helped with expediting a little bit because we would get more stuck before we have that clarity. Kind of this stalemate of well, now what?

Erika Shilling  

And it really helps with being able to take things off your own plate, so that you can feel some of that stress relief, and know that she’s got it. She knows that I’ve got it. And we just don’t have to think about everything.

Maureen Werrbach  

Yeah. Yeah, I love that. All right, what’s number three?

Michelle Mullaley  

So number three, actually, is something that we also put in place about three years ago for ourselves. And it’s been absolutely, I think it’s changed our dynamic and our ability to kind of lead from a really cohesive place. Yeah. Which is what we you know, it’s the thing that we use to facilitate all this kinds of communication. And we call it our bridge meeting. And so once a month, we take an hour and a half, two hours, often away from the office. Ideally, no computers, no notepads, it’s really the goal is to focus on a relationship. Because just like a marriage, if all you’re doing is talking about when the kids need to get there, what’s for dinner, you can disconnect, and then don’t even realize it until the gap is too wide. And so we want to really be careful not to allow that. And so those meetings are, you know, communication about what’s working opportunities to give, you know, kudos to your partner for doing great at something or to kind of say, like, what’s not working what, what might we need to tweak either in our communication or some of our processes, kind of on that big picture level? Not on that “let’s take notes on what we’re going to do after today” level. And then to be able to kind of talk about some of the hard stuff. You know, like sometimes we’ve had different times when one of us had a lot more personal stressors going on. That’s life, right? So one of the big pros of having a partner and someone’s picking up the slack. You can be gone for two weeks because there’s been a loss or on a vacation and somebody’s got it right? And you know that but it takes communication about sometimes the hard stuff. Like I’m going through something hard, I really need your extra help or gosh, you’ve been missing lately, what’s going on? You didn’t know this, but I was going through something. And so it, sometimes they’re hard conversations, but sometimes they’re really enriching and you walk away with that kind of shared purpose again, and reconnection again, kind of like you know, a date night in a marriage type

Maureen Werrbach  

I like this idea because it’s, um, again, I bet and I’m assuming this is maybe part of the reason why you’re naming this is like the biggest issue that you see or like, the most important thing to think about, of these three is that this is again, one of those like non revenue generating or growth, like a literal growth thing. And so people likely are are just busy with their day to day stuff and are like we, just want is there anything wrong? Tell me something’s wrong. Otherwise, let’s go to like all the things that we haven’t yet done. And so like really prioritize that and say, nope, this is our non computer non text, we’re not writing notes, we’re just gonna talk. I mean, it’s, it’s like culture building, you know, those, those things, also, that people sometimes don’t prioritize as much as outcomes and stuff. 

Erika Shilling  

Yeah, I do think it’s really easy to step over that time. And because you always have a ton of things to do, and get to and even for us, we have to be careful that those things don’t find their way into the conversation. And especially if there’s something that is more difficult for us to talk about, or, you know, where our communication maybe hasn’t been great. It is easier to go to those other things that are more practical to do. But it becomes even more important, so that there’s nothing that kind of remains residual that you really get that time. And I do think it is the most important because it is that communication piece that runs through everything that we do. It’s part of how we keep it from getting to that resentment point.

Michelle Mullaley  

You mentioned earlier, if somebody you know, you feel like you’re not doing this, well, actually, I was doing stuff, but you didn’t see that I you know, or it was behind the scenes. It really helps to kind of get back on the same page. Yeah.

Maureen Werrbach  

And I bet that, you know, having it regularly scheduled every month, not only creates that habit, but if you’re not regularly scheduling it, it’s likely that someone’s going to schedule it as a response to an issue. And then that doesn’t feel fun, either. Because then you’re like, Oh, I need to, you know, I’d like to have a sit down. And you know, chat about some stuff isn’t as fun because waiting for the first is like knowing that this is happening, whether things are going great or not. It’s like this habit of really just connecting on a different level. So I love that. Yeah. I really appreciate you guys coming on and giving a few small tips to those that might be considering it. Tell people where they can reach you if they are thinking about starting a partnership or wanting to ask some additional questions.

Erika Shilling  

Yeah, absolutely. So we do have Bridges Consulting. And both Michelle and I are available. We don’t have–I think we have an email setup and a phone line setup. We can use 703-865-4900. And extension one is Michelle, extension two is me. And yeah, we can send you some more information to put in the show notes too.

Maureen Werrbach  

That would be perfect. That works perfectly. Well, I appreciate you guys coming on early in the morning. I don’t know what time it is over wherever you are. Yeah. But yeah, I appreciate it. Hope you have a great rest of your week, and we’ll be talking soon.

Michelle Mullaley  

Great. Well, thanks so much. 

Erika Shilling  

Yeah, thank you so much for having us.

 

Thanks For Listening

Thanks for listening to the group practice exchange podcast. Like what you heard? Give us five stars on whatever platform you’re listening from. Need extra suppor? Join The Exchange, a membership community just for group practice owners with monthly office hours, live webinars, and a library of trainings ready for you to dive into visit www dot members dot the group practice exchange dot com forward slash exchange. See you next week.

Resources

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Group Practice Start Up Checklist

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* I am an affiliate for some of the businesses I recommend. These are companies that I use in my own group practice, and make recommendations based off of my experience with them. When you use some of these companies through my links, I receive compensation, which helps me continue to offer great free information on my podcast, blog, Facebook group, and website.

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Meet your host

Maureen

Maureen Werrbach is a psychotherapist, group practice owner and group practice coach. Learn more about her coaching services here:

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The podcast is structured so that you get practice building tips in small doses, where an episode can be listened to (and a group practice building lesson can be learned) in a single car ride.

Episodes are structured into categories: coaching sessions where I coach a group practice owner on a specific topic, tips of the day by yours truly, real talk where you get to be a fly on the wall while an established group practice owner and I talk about the highs and lows of ownership, and trainings done by experts in the field.

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