Should I buy into the private practice offering me partnership, or stay employed?

Compare total packages, not headline income

Partnership pitches lead with the partner income figure and stop there. Your comparison cannot stop there. Build two columns with the same line items. On the employed side: base and production pay, employer retirement contributions, health coverage for you and your family, disability and life coverage the employer carries, malpractice coverage and tail, paid time off valued at your daily rate, and any loan assistance or sign on money still in the contract. Family medicine starting offers commonly guarantee a base for one to two years before production, which is downside protection an employed physician often forgets to price until it is gone.

On the partner side: your draw, your share of practice profit after every expense, and the costs that move from the practice to you. Partners commonly pay their own health coverage, fund more of their own retirement, carry their own disability policy, and absorb slow months directly. Then subtract the buy in itself, spread across the years it takes to earn back. Here is the arithmetic in its simplest form, with round illustrative numbers you should replace with the actual offer. If the buy in is $120,000 and partner total compensation clears your employed total package by $40,000 a year, the simple payback is $120,000 divided by $40,000, which is three years, before you have earned one dollar for the added risk, the added administration, and the capital you have locked in a business you cannot sell on an open market. A spread that needs a decade to repay the buy in is not a partnership opportunity. It is a loan you are making to the practice, secured by your own labor.

Also ask what the equity buys on the way out. A share you cannot value, cannot sell, and lose on departure is not an asset in any normal sense. Get the exit terms in the same conversation as the entry terms, in documents, not in assurances.

The diligence list, and the rule that governs it

Never pay a buy in you cannot trace to three years of partner income numbers. That is the rule, and the diligence list exists to serve it. Ask for, and actually read, the following.

Three years of practice financial statements and tax returns, so partner income is a record and not a recollection. The compensation formula in writing, showing how revenue, overhead, and ancillary income are divided, and how that formula treated the most recent partner to join. The payer mix and the top contracts, because a practice dependent on one payer or one hospital referral stream is a concentrated bet. The lease and every equipment obligation, with end dates, because partners own those commitments the day they sign. Malpractice history and tail obligations for departing physicians, which have a way of becoming shared costs. The ages and stated plans of the senior partners, because buying in behind partners who plan to retire soon can mean buying the practice twice, once now and once to fund their exit. Accounts receivable and how they are valued in the buy in price. And the governing documents themselves: who decides hiring, firing, schedules, and new partners, and what vote your share actually carries.

Bring in your own attorney and your own accountant, paid by you and loyal to you, to review what you receive. Healthy practices recruiting a long term partner expect diligence and have clean files ready. Evasive ones are telling you the equity is priced on trust because it cannot be priced on numbers.

The sale question, asked before you sign

Ask directly whether the practice is in talks to sell to a health system, a private equity platform, or a larger group, and ask what your new share is worth the day after such a sale. This is the most common way a junior partner buy in goes wrong: the new partner pays full price for equity, the practice sells shortly after, the senior partners collect the sale proceeds weighted by tenure or ownership history, and the junior partner discovers the buy in purchased a brief and expensive title. Get the treatment of a sale in the partnership documents before you sign, including how proceeds divide and whether a sale inside a set window changes your buy in obligation.

None of this argues against partnership. Ownership is where much of family medicine income above the averages is built, through ancillary services, real estate, and profit that employed contracts pay to someone else. The employed averages above are a floor to clear, not a ceiling to fear. Partnership wins when the numbers clear that floor by a wide, documented margin, when the governance is real, and when the exit is written down. Buy the business the way you would buy any business: verified income, known obligations, clear exit. If the practice is as good as the pitch, the documents will say so.