A partner hires an administrator at $120,000 and mentions it at the Thursday huddle, after the offer letter has gone out. Nobody planned for the position. Nobody priced it against the budget. Nobody asked what happens to the practice manager’s role now that a layer sits above it. The hire may well turn out to be excellent, and the partners will still spend six months relitigating it, because what was actually violated was not the budget. It was the question of who gets to commit the practice.
Staffing is where governance breaks first in most medical practices, and it breaks in both directions. One partner hires unilaterally, and the group discovers a six-figure obligation it never voted on. Or nobody has authority to hire at all, so a departed office manager’s replacement goes unfilled for five months while two owners tie on every candidate and the practice quietly runs without an operator. Both failures trace to the same missing paragraph.
The fix is a tier framework, and it is the single most practical structure in a partnership agreement: the line separating what can be decided without a vote from what cannot, drawn three times. Operational decisions belong to the managing partner or administrator. In a typical single-site practice the bands run to $10,000 of unilateral authority, with a notice-and-objection band from $10,000 to $50,000 in which spending proceeds after five business days’ notice unless a partner objects. Above $50,000, a vote is mandatory. Significant decisions take a partner vote at simple majority. Fundamental decisions—the reserved-matters catalog—take a supermajority of two-thirds to 75 percent. The principle underneath is reversibility: the harder a decision is to undo, the more consensus it should require.
Map staffing onto those tiers by role rather than by headcount, because a $65,000 medical assistant and a $65,000 stipend for a new administrator are not the same decision.
Provider hiring sits at the top. Physicians, nurse practitioners, and physician assistants are not staff in the governance sense. Each one reshapes the schedule, the panel, the call rotation, the supervision economics, and every partner’s production for years, and each carries a multi-year contract the practice cannot casually exit. Require a full partner vote for every provider hire and every provider termination, and set the threshold at supermajority where the group can carry it. The compensation package goes to the partners with the offer, not after it.
Executive and administrative leadership sits at the same height. A practice administrator, a chief operating officer, or a director of operations holds authority delegated from the partners themselves, which makes the hire a governance decision wearing a personnel costume. Require the full partnership to approve the role, the compensation band, and the reporting line, and require the same to end it.
Clinical staff below the provider level—nurses, medical assistants, front-desk and billing personnel—belong to the managing partner or administrator within a defined budget. The budget is what makes the delegation safe. Approve a staffing plan annually with positions, ranges, and total headcount, and then let the person running the practice fill it without a meeting for every hire. Spending inside an approved budget is execution. Spending outside it is a new decision, and it takes the tier the dollar amount assigns.
Non-clinical and administrative staff follow the same rule, with one addition. Name a compensation ceiling above which any hire, in any category, returns to the partners regardless of budget. Titles migrate and roles inflate; a dollar threshold does not.
Terminations deserve their own sentences, and most agreements skip them entirely. Authority to end employment should mirror authority to create it: providers and leadership by partner vote, everyone else by the manager who supervises them, inside a written process. That process is the practice’s insurance. Documented performance concerns, delivered in writing, with an opportunity to correct where correction is plausible, and a consistent approach across similar situations. Employment law is state-specific and unforgiving of improvisation, and any termination involving a protected characteristic, a complaint the employee has previously raised, a leave, or an accommodation goes to employment counsel before it happens rather than after. The partnership agreement’s job is not to summarize that law. Its job is to require that someone qualified be consulted, and to name who makes the call.
Three habits matter more than the thresholds themselves. Index the dollar bands or revisit them annually, so numbers set in one decade do not govern the next. Name signature authority explicitly—who may bind the practice contractually—and make unauthorized signatures personally recoverable, because vendors and recruiters do not read bylaws. And protect every partner’s access to the monthly financial package, the books, and the practice-management system without exception, since a partner who cannot see the payroll cannot govern the staffing.
One more instrument turns a threshold into an instruction. A dollar limit says what a manager may decide; it says nothing about how much oversight the decision carries. A five-level delegation ladder fills that gap: do exactly as instructed; research and return with options; recommend, then proceed on approval; complete independently and submit for review; complete and report only by exception. Naming the level when the task is assigned prevents both the micromanaged manager and the surprised owner.
Red flags. A managing partner who may hire anyone at any compensation level without consultation. No budget threshold defined anywhere in the document. Terminations handled informally, by conversation, with nothing in the file. No governance distinction between hiring a medical assistant and hiring a physician. A new provider hired, and the partnership informed afterward. And the mirror-image failure: a vacancy nobody has authority to fill, sitting open for months while the practice absorbs the cost of the empty chair.
Write the staffing policy down, reference it in the partnership agreement, and retranslate the thresholds into names at every admission. In a partnership, staffing is governance. Treat it that way.
| Tier | Dollar band | Authority required |
|---|---|---|
| Operational | Up to $10,000 | Managing partner or administrator decides unilaterally |
| Operational, notice band | $10,000 to $50,000 | Proceeds after five business days' notice unless a partner objects |
| Significant | Above $50,000 | Partner vote at simple majority |
| Fundamental | Reserved-matters catalog | Supermajority of two-thirds to 75 percent |
Clinical staff below the provider level, along with front-desk and billing personnel, belong to the managing partner or administrator working inside an annually approved staffing plan of positions, ranges, and total headcount. Spending inside an approved budget is execution. Spending outside it is a new decision, and it takes the tier the dollar amount assigns.
Yes. Providers are not staff in the governance sense, because each one reshapes the schedule, the panel, the call rotation, the supervision economics, and every partner's production for years under a multi-year contract the practice cannot casually exit. Every provider hire and termination takes a full partner vote, at supermajority where the group can carry it.
Authority to end employment mirrors authority to create it: providers and leadership by partner vote, everyone else by the manager who supervises them, inside a written process. That process means documented performance concerns delivered in writing, an opportunity to correct where correction is plausible, and a consistent approach across similar situations.
The Partnership Agreement Analyzer scores an existing agreement against the framework this series is built on — or schedule a discovery call to work through it with PMI. The full framework, with the arithmetic, lives in the textbook Pediatric Practice Management: The Fundamentals.