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Deciding how much to pay a managing partner
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Compensation for a managing partner is influenced by many factors. If all of the partners within a practice assume the role in equal rotation, the position can be uncompensated. In most practices, however, the managing partner duties are not equally shared. Compensation in this case should definitely be paid.
What is the proper amount? In the best of circumstances, the stipend ends up being little more than a token honorarium, roughly proportional to the size and success of the group. In a two- to five-doctor practice, a payment of $18,000 to $36,000 per year is typical. As you can see from this, a partner working 10 hours per week on the practice’s behalf is only going to earn about $50 per hour, far less than he or she would earn seeing patients. In larger practices, in which more time is required and the lead partner’s stipend is divided among more owners, the managing partner may receive more than $50,000 per year.
In a small number of settings, managing partners receive a bonus based on practice collections or profits. However, this is uncommon and does not seem to influence performance. If anything, a struggle can erupt because the managing partner tries to boost his or her bonus by overworking colleagues.
How it works
Tenure in this leadership role should be 2 years or longer. An annual rotation — often chosen out of a misplaced desire to assure fairness by giving everyone a shot at the job — results in doctors stepping down just as they are starting to learn the nuances of the position.
Succession should be handled with great sensitivity. Rather than a simple majority approval, it is preferable to nearly follow the rules for a papal election, in which nothing less than full consensus must be achieved.
In my experience, any practice with two or more owners should designate a formal leader, even if at this smaller scale all policies and decisions are typically derived through the complete consensus of the owners. Line staff in the trenches especially benefit when the organization chart makes it clear that they report to their immediate supervisor (head tech, billing supervisor, etc.), who in turn reports to the administrator, who then works most closely with the managing partner to execute the board’s mandate.
Keys to success
Here are some coaching points and success factors we have learned through the years from long-term lead partners who not only enjoy the durable support of their peers, but also have an absolute ball doing the job.
- Stay informed. One of the best compensations of being the leader is the informational privilege that it confers. Knowing which way the wind is blowing both inside and outside the organization is critical to your success and satisfaction in a leadership role.
- Delegate avidly. You cannot do it all. In the busiest years, you cannot even touch half of the opportunities personally. You should be personally engaged only in those areas and projects that are most interesting to you and crucial to the company. Remember that the best way to stimulate involvement in any group setting is to give people a job to do.
- Set firm boundaries at the outset. For example, early in your tenure when you send an email requesting feedback, set a deadline and follow up with stragglers. Do not let your partners get in the habit of blowing off meetings or failing to follow up with your reasonable requests.
- Make everyone responsible for success or failure. Unless you are a practice dictator — in which case, it is really all on you — your organization is going to rise or fall based on everyone’s contributions.
- Find the right balance between dictatorship (which on the toughest days sounds pretty attractive), guile and collegiality. Sometimes it is appropriate to be in touch with your “inner Machiavelli” and play one side against another for the benefit of the organization.
- Hold your management accountable for their agreed projects in terms of content, quality and timeliness. Be clear about the specific outcomes you expect from them.
- Communicate effectively. There are going to be times when you have to give speeches to the board, management team or the entire staff. If you are not a natural orator or tend to stray off your core message, speak from written notes.
- Meet with staff members every few weeks during a casual lunch. These informal sessions will not only give you a glimpse of life in the trenches, but your staff will also see you as more approachable and will seek you out with their future concerns. This feedback is invaluable for a leader.
- Be honest. Long-term success is only possible if you are authentic, approachable and ultimately vulnerable in your dealings with others. If you are at wits’ end with your board, your administrator or an outside party, say so and let the chips fall where they may.
John B. Pinto is president of J. Pinto & Associates Inc., an ophthalmic practice management consulting firm established in 1979. He can be reached at 619-223-2233 or pintoinc@aol.com.