Legal considerations offered for early career psychologists

Early career psychologists have several legal issues to consider while establishing private practices.

Offering tips through a Massachusetts Psychological Association (MPA) forum was Bill Mandell, Esq., founder and co-managing partner of Pierce + Mandrell, a Boston-area firm specializing in health care.

A key area is “winding down existing relationships,” Mandell said, whether those be with employers, staff, clients or patients.

“The sequencing is very important,” he said.

To avoid legal problems, the attorney advised treating the transition like any other interview for a new job.

He said it is fine to engage in negotiations, establish an entity, obtain credentialing, and sign a lease before turning in a resignation.

However, what an individual should not do is “jump the gun and start notifying marketing, soliciting staff, clients, and referral notices. That could get a claim against you,” Mandell said.

Ethically and legally, he said, psychologists must inform patients about their intent to depart, at least 30 days in advance, preferably more, in writing.

He noted a recent statute passed by the House calls for physicians to give 90 days-notice before the event of a transition. Should the legislation be enacted by Senate vote, it is unclear whether psychologists would be included.

“We’ll wait and see,” Mandell said. “Until the law changes, the APA standards say no less than 30 days.”

Another consideration involves “non-compete,” clauses. Mandell said post-termination, no matter how long it lasts, non-competes are unenforceable against psychologists.

For example, if within the contract it says, “you will not own or be employed within a 15-mile radius,” that is not enforceable, the attorney said.

But, Mandell added, “you cannot take a patient list, staff members, or directly try to bring clients where you are going. Be careful.”

Regarding `trade secrets,’ and proprietary information, Mandell said they cannot be shared, even without a non-disclosure agreement. That is an area where psychologists could be subject to a lawsuit.

Other decisions when establishing a practice include determining the type of client engagement—in-person, fully remote, or hybrid; picking whether to lease or buy office space; hiring contractors versus employees; choosing an entity; and selecting insurance.

Mandell stressed the importance of having adequate liability insurance including optional riders for issues like cybersecurity.

He noted, “there is as much a chance of being sued by former staff than a patient.”

Mandell also spoke about on-boarding forms for patients and making it clear whether it is a private pay only operation or outlining which insurances are accepted.

Choosing between establishing a professional corporation, limited liability corporation, professional limited liability partnership, general partnership, or sole proprietorship is another important consideration, he said.

He advised forming an entity in conjunction with a certified public accountant. But he did say LLCs have greater flexibility with tax classifications, while PLLPs are not something with which you want to start a new practice.

On the issue of hiring independent contractors or employees, Mandell said, “The most important takeaway Mass law has on the books is that if people work for you, they are presumed to be employees and you have to treat them as employees.”

To do otherwise could be risky, he said.

“Be careful how you bring clinicians into your business,” Mandell advised.

The attorney also spoke about telehealth in the wake of COVID-19 waivers expiring. He pointed out how the laws are state specific and vary and the importance of knowing about licensure requirements in the state where a patient resides.

Mandell also noted that some states are part of a multi-state compact.

Telehealth should also be thought of in terms of what is best for the patient, he suggested.

“Is telehealth the best fit for a high-risk case or (a patient) accustomed to in-person care?”