This is the fifth article of a multi-part series on the process of health care transitions prepared by Samuel N. Klewans and Michael Skerritt.
Select Experienced Health Care Practice Transition Attorney’s, CPAs and Bankers
Whether you are a potential third-party purchaser, an associate who hopes to purchase an interest in a practice, or the seller of an existing practice, careful selection of an attorney, CPA, and/or banker with specific experience in health care practice transitions is essential to an efficient, successful transaction. You may not have an attorney, CPA or banker to assist in your transition, but if you do, they may not be the correct professional to represent you in this type of transaction. As an example, you would not go to the dermatologist to have open heart surgery. Yes the dermatologist is a physician and yes the dermatologist may have had a course or basic training in vascular surgery or heart surgery, but that is not what the dermatologist does in his or her day-to-day practice. It is the same with an attorney, CPA or banker. You would not want someone who is a general practitioner or a criminal attorney or a personal injury attorney to assist you in the transition. Likewise you would not want an auditor or general CPA to assist you in a health care practice transition.
Additionally, when selecting a banker it is important to understand that not all bankers are familiar with the nuances of health care practice transition financing. As mentioned in Part Four of this series, banks typically do not loan money using the same criteria as other types of loans because with health care practices, they are essentially financing the business’s cash flow.
There are attorneys, CPAs or bankers who concentrate in these specialized areas of law, accounting, and financing and you will want one of these specialists to represent you. In our experience, attorneys, CPAs or bankers who have little or no experience in health care practice transitions take indefensible positions and then defend them to the death. Whereas, experienced transitional professionals know what questions to ask, what documents to prepare, what needs to be covered in the documents, what the tax implications are and how to resolve them, and what the purchaser’s ongoing legal and tax considerations need to be after the transition. This extensive knowledge is invaluable to anyone seeking to purchase or sell a health care practice.
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