Show Notes

Welcome back to the designer practice podcast and I’m your host Kayla Das.

Whether you’re being hired by a group practice or you’re a practice looking to hire, it’s important to understand the difference between an employee and an independent contractor. Most of us are fully aware of what it takes to be an employee, and most of us have worked somewhere before going into private practice where we received a steady paycheck or salary.

However, when it comes to being an independent contractor, most of us know less about what it is and how it works, only that as an organization, we don’t have to pay payroll deductions or pay into employment insurance or the Canadian pension plan. But there’s more to it than just avoiding the additional accounting headaches. It takes consideration when hiring a contractor or even being an independent contractor for another practice.

In this episode, I’m going to break down the difference between being an employee and a contractor, some of the benefits and considerations for each, as well as help you identify which is best for you in your private practice, whether you’re planning to hire someone in your private practice, or whether you’re a private practitioner trying to navigate the world of accepting contracts.

Definition of Independent Contractor

First of all, in this episode, I’m probably going to use the words contractor and independent contractor interchangeably, but when I am talking about a contractor in this episode, I’m talking about a person or a business that’s hired by another person or a business to do a task for that business in exchange for an agreed upon pay structure between both parties.

As therapists, when we’re hired as independent contractors by group practices, we’re being hired usually as a freelancer. or through our private practices to do a specific task, which is the act of therapy, with clients who come into the business, specifically the group practice, seeking therapy.

When hired as independent contractors, we usually agree upon a pay structure with the group practice, which in the therapy world is usually a pay split of a total amount charged to the client for that session. Typical payment structures tend to be an 80/20 split, a 70/30 split, or a 60/40 split. But of course, there are so many other pay structures that could occur, but these are the three most common that we see in the therapy world.

A little later in this episode, I’ll dig into how to determine if your pay split is a fair agreement for you as a group practice or as an independent contractor.

Employee vs. Independent Contractor

 So, let’s discuss the difference between what an employee or an independent contractor is.

So, the difference between an employee and an independent contractor is an employee is being hired by a business to work in that business on multiple tasks in a specific role and is usually given a guaranteed amount of hours of work, of course, unless you’re a casual employee, for a specific hourly wage or salary.

Whereas an independent contractor, you’re hired to do a specific task and get paid to complete that task. If you complete it, you get paid. If you don’t complete it, you don’t get paid.

Also, as an independent contractor, you’re not guaranteed hours of work unless of course you and the business had agreed upon something otherwise in the contract and you work when work is available.

So, you’re not necessarily guaranteed hours, but when work is available you work on those tasks. Because as an independent contractor, you’re not guaranteed hours of work, typically, this is why independent contractors take on more than one contract within group practices or other type of practices, or they even run their own private practice on the side. Because, for all intents and purposes, they’re self-employed individuals.

Non-Competition Clauses

Now I am fully aware that in our field, many therapists are met up on hire with a non-competition clause, which in my opinion, is unethical. And if you haven’t listened to episode 28 of the Designer Practice Podcast, Non-Competition vs. Non-Solicitation Clauses, Are they legally enforceable in contracts? Where Corinne Boudreau, a Nova Scotia lawyer, discusses the differences between both clauses and when they’re enforceable and when they’re not. You’ll want to listen to that episode right after you listen to this episode, regardless if you’re a therapist wanting to be hired by a group practice, or you’re an owner of a group practice looking to hire.

To check out episode 28, you can check it out at kayladas.com/episode28.

But back to non-competition clauses, outside of everything Corinne outlines from the legal side in episode 28, I believe non-competition clauses are unethical because unless someone can guarantee you full-time hours, how can they tell you that you can’t work for someone else, whether it’s another practice or your own private practice.

And honestly, as a group practice, if you’re hiring independent contractors, I can’t imagine anything more freeing than not feeling the overwhelm and pressure to keep bringing in a flow of clients so that you have clients for your contractors to work with. So, in my opinion, a non-competition clause actually impacts the business, and it impacts the person being hired.

One barrier that stops therapists from hiring to begin with even if they are at a place where they should, is the fear that they won’t have ongoing clients to give to those that they hire. And honestly, hiring a contractor, who you support working additional jobs and taking on additional tasks at other places, whether it’s other group practices or working in their own, can alleviate the pressure and get you moving forward so you can finally hire your first therapist.

Key Considerations Between Employee and Independent Contractor

 So, I’m going to breakdown some key considerations between an employee and an independent contractor to help you determine which one best fits your practice.

So, let’s start with an employee. Basically, an employee is someone who typically works for one business, usually for a guaranteed amount of hours, and they receive a salary or wage. The business, meaning the group practice, has control over the person’s schedule, including when they work and how the work is done and carried out. The business has the employee on an employee payroll roster, which includes payroll deductions, paying into EI, CPP, health benefits, and any other payroll deductions that are required by a specific province. Employees are also protected under the employment standards or laws in their province. So that’s important to know too that every province has its own employment standards. So, employees are protected under these laws.

Whereas an independent contractor is essentially a self-employed individual. They’re a person who is working with multiple businesses, whether it’s as a freelancer as a business, as a corporation, I mean, any specific setup for an agreed upon rate of pay to complete a specific task. This is why going back to non-competition clauses, I feel they are unethical, regardless of any legal enforcement that they have is because the very definition of an independent contractor is that they are self-employed, which means that they would run their own business and that they could take on business with multiple individuals or other businesses.

Also with independent contractors, the business, meaning the group practice, has very little or no control over what, when, or how the person conducts their work, as long as it’s completed as per the agreement and contract. This means that when you’re hiring contractors, they have control over their own schedule, therapeutic modalities, and approach to therapy. Also depending on their schedule, they may accept or decline client referrals. So, this is also important because if independent contractors are self-employed individuals, they also have the autonomy over their own schedules. The group practice does not put the independent contractor on an employee payroll roster, and does not have to provide payroll deductions, pensions, or health benefits. Also, independent contractors, because they are self-employed individuals and are not employees, they are not protected under the employment standards or laws in their province.

The other thing to also consider here too is that independent contractors, because they are their own business, they often have their own overhead for the software that they use, for the technology that they use, whether they have to go buy their own computer. All of these types of things are in the realm of an independent contractor. Whereas if you were an employee, you would expect that the organization would provide you all of the material that you need with no cost whatsoever.

Now, it’s also important to make sure that when you hire an independent contractor, that you don’t blur the lines and think of them as an employee, and this is because the Canadian Revenue Agency, or otherwise known as CRA, can complete audits on organizations, which, as a group practice, if you fail their “test” for being a self-employed individual, and it actually turns out that they feel that you actually have an employee and you’re treating your independent contractors like employees, you may be required to pay back missing deductions. And this is really important to know, because when we don’t really know the difference between an employee and an independent contractor, the lines can get blurred, but it’s really important that you choose one classification or the other. Because according to CRA’s Employee or Self-Employed Guide, this is what they say, and I’m going to quote this, “An employer who fails to deduct the required CPP contributions or EI premiums has to pay both the employer’s share and the employee’s share of any contributions and premiums owing, plus penalties and interest.” (CRA, n.d.) So, I’m going to link to this guide into the show notes. So, if you’re interested in looking more of the CRA’s guide of employee versus self-employed. It’s a really great guide to look through to further understand if you’re hiring employees or independent contractors.

But if you fail the test of CRA, if they determine that you really have employees and not independent contractors, and you haven’t been doing these payroll deductions, you then have to pay your portion as the employer, and the employee’s portion. Because when you hire an employee, they pay a portion and you pay a portion as an employer. Also, you would pay penalties and interest on top of that. So, it’s just really easier to determine are you hiring an employee, are you hiring an independent contractor, and staying in that lane.

So, in essence, if you’re looking to hire an employee, then hire an employee. If you’re looking to hire an independent contractor, then hire an independent contractor. But don’t hire an independent contractor just for the sake of saving money and payroll deductions and then treat them like an employee. Because it could come back to haunt you. And nobody wants that.

Independent Contractor Payment Structures

So, I want to go back to the payment structures and the split for a second as well. As I already mentioned, the typical payment structures for therapists are that of a split between the cost per session that an independent contractor works with a specific client, which is commonly found as 80/20, 70/30, or a 60/40 split. Sure, there are other payment structures and splits, but these are the most common that we see.

And I’m going to give you an example of this. If you are a therapist, and you were paid a hundred dollars a session, and I’m going to use a hundred because it’s easy math, and you as a therapist and the group practice have agreed upon a 70/30 split. This means that the therapist gets 70 percent of the cost per session that they worked, which is a total of $70. And then the business or the group practice gets 30%, which is $30 of the same session.

Now you might be wondering, how do I determine what a fair split is?

And this really depends on multiple factors, but in general terms, the more the group practice provides the therapist will typically mean the more that the group practice can reasonably accept in that split. And of course, if you’re a group practice, you’re going to want to think about this before you hire the independent contractor, because when you create your business contract with that specific therapist, you’ll already want to know what you’re agreeing upon so that you can have it written inside the contract.

Also, as a therapist being hired by a group practice, you also want to ensure the things that the group practice says that they’ll offer in exchange for that split is also included in that contract because it helps keep the practice accountable in providing these resources to you ongoing. It’s really easy to forget or miss certain components to a contract. So, you really want to make sure that you have these written down.

So, I’m going to give you an example here. Let’s say I agree upon a 70/30 split and these are the following things that are agreed upon that I as a therapist receive with that split. Two-hour supervisions or case consultation sessions per month, access to an office space rent free for the group practice clients, and for the practice to conduct all billing required from any client sessions that I have. And then I noticed that I’m not getting my two-hour supervision case consultations a month. If it’s in the contract, I can go to the owner or the supervisor and reiterate that in exchange for the higher split, I receive two supervision sessions a month and ultimately the practice should follow through with that as it’s within the official contract and agreement. If they don’t follow through, in my mind, it would be fair to renegotiate the split.

However, if you do not have this written in the agreement, it’s much, much harder to enforce because the contract is a legal binding agreement between you and the practice. Now as you know I am not a lawyer and I am not providing any legal advice here. But as most of us know, if it’s not in writing, it didn’t happen. And as therapists, we hear all the time, especially when it comes to case notes documentation, if it wasn’t written down, it didn’t happen.

Considerations for Determining a Fair Payment Split

Okay, let’s talk about some of the considerations when determining a fair payment split.

Now, there’s no one formula for determining this, so I can’t give you a specific breakdown of what constitutes in each split setup. And that’s because every therapist will have different things that are more valuable or less valuable to them. Which means, someone who finds something valuable may be more likely to accept a lower cut of the profit than someone who finds it less valuable.

Also, at the end of the day, the practice ultimately has the final say in what they charge because they are the people who run the organization and they also know the cost and overhead it takes to run their business. Although you as a therapist also have the final say and whether you decide to accept that offer or walk away from it once negotiation has finalized.

But here are some benefits that might be valuable to therapists, and the more you as a group practice offers, the easier it is to justify the larger cut of the profits.

Marketing and administrative process or personnel to get clients inside the practice so that therapists have clients to work with. This may also include paying for therapist directories or other things that the practice themselves is paying for on behalf of the contractor.

Another benefit would be providing free regular supervision or case consultations. This may even be more valuable for therapists who may still require supervision hours for their regulatory body.

Providing office space for the clients of the practice, or even for the therapist to use when working with other clients, say within their own private practice.

Billing and payment acquisitions by the practice. So, the therapist doesn’t have to work through all of the payment hassles, especially if someone cancels or doesn’t pay. Because billing can suck up a lot of time and this is usually a perk that many therapists want and appreciate.

Also, free access to company’s practice management software, for free, for case notes, booking, video capabilities for virtual sessions. If you’ve been following me for a while, you know that my favourite practice management system is Jane app. And I am an ambassador for them. So, I’m always talking about them, but I’m also a user of the platform first.

Also access to receptionist or administration professional for incoming and outgoing clients.

Access to material or space within the office, such as a fully equipped kitchen, mailbox slots, bottled water, or coffee for clients. These are all things that have a cost for the practice, but certainly promote a better experience for you and your clients.

So, these are some of the most common benefits but there are certainly other benefits that the group practice can offer and again the more the group practice offers the more reasonable the split.

Also, something I didn’t list above because it’s not material, but definitely shouldn’t be overlooked, is the reputation of the practice.

For example, if you’re working for a high end, top of the line group practice who is well known in the community and their reputation is stellar. Then they’ll likely have a higher client flow and probably charge a premium price, which means as a therapist, you’ll get more clients quicker and you’ll probably get a higher rate of pay even with a lower split.

Let me give you an example here. Let’s say that you had an offer to join a less well-known group, practice the charges or clients $100 per session and they offer a 80/20 split. So, you as a therapist get $80 and then the group practice gets $20.

But then you get a second offer to join another group practice who is well known in the community, and they charge $200 an hour, but take a 60/40 split. So, you get $120, and they get $80. If all things were equal with respect to benefits, you’re still making $20 more per session at a lower payment split. And if they’re well known, they’re likely going to have a lot more clients to fill your calendar.

So, the reason I’m sharing this is don’t knock the reputation factor, as it can be a huge benefit as well, even if the split is less favourable.

Negotiating the Contract

So going back to the contract that we talked about earlier, as a therapist looking to be hired as an independent contractor, you have the right and even, in my opinion, obligation to negotiate the terms of your contract. Because I look at independent contractors as business owners, again, whether freelancers or practice owners. And it makes complete sense that another business professional would negotiate their rate in terms of their contract with a business.

If you’re a group practice owner, it’s also important to recognize this and not be offended when someone tries to negotiate the terms of their contract. You as the group practice have decided the route that you wanted to take, which is to hire independent contractors for the perks, such as not having to pay payroll deductions or pension contributions, and also not have to worry or feel the pressure of constant flow of clients and so on. But you’ll also need to accept the not so appealing sides of it too, which is the negotiation side of the contract.

As a group practice owner, at the end of the day, you still have the final say upon that agreement, but understand that one of two things could happen. The person either accepts to offer, which of course is the hope and that’s what we want to happen. Or they are unhappy with the terms and they walk away leaving you searching for another person to fill that spot. And if that person is someone who you know would be a great fit for your practice. Because you don’t necessarily want to negotiate a contract probably isn’t a great reason to lose an amazing person. So really think about whether or not you’re open to a negotiation because if you’re hiring independent contractors, it is definitely their right to do so.

And I want to go back to something I said before is that you want to hold each other responsible for the clauses you’ve both agreed up in the contract. Whether you’re the practice or you’re the therapist, you’ve agreed on terms and if the terms are not being met, it is your right to bring it to the other person’s attention and to hold the other party accountable. And that’s because you’ve both agreed on what you were going to give and take as a result of that independent contractor relationship.

Reciprocity vs. Resentment

Something I believe in is the idea of reciprocity. And that is when you treat hirees well, whether again they’re employees or independent contractors, they are going to want to give back to you as the group practice. So, what I mean by this is that I believe when you as a practice owner, hires new team members, and you consider their values and their needs. Those hired will appreciate this and continue to support you and your business, maybe even years after they’ve moved on to other initiatives, they might bring clients your way, they might send people to be hired your way, basically you’re building up your reputation as a great place to work.

Unfortunately, the traditional and dare, I say, old-school thought of “People should appreciate the job that they have regardless of how they’re treated” is still prevalent today in many sectors, but all it leads to is employee or contractor resentment.

And someone who is hiring new people into your practice, you definitely don’t want to set up the resentment as the number one emotion that your hirees feel, because it ultimately won’t serve you or your practice in the long run.

When hirees feel resentment towards their employers, the following occurs:

(1) They stay at your organization because they need the money, but they become apathetic towards the clients and the work, which may eventually impact client retention and profits of your group practice.

(2) They stay, and they shift the organizational culture, not in a positive way. Especially, if more than one person feels a sense of resentment. The organizational culture is one of the easiest things to break. But the hardest things to fix. So, making an effort to try to meet at least some of your employee or contractor’s needs and values can help create a positive work culture where people want to work.

(3) And finally, they leave and you’re left trying to hire and onboard new therapists, which can become costly and time consuming overall, especially if your practice becomes a revolving door.

Now I want to be clear though, I’m not saying that you have to run off your feet trying to meet every need and value of every single employee or contractor. But a tip I have is when you start hiring, if you’re searching for therapists who hold similar values or visions to yourself and your practice, it will become a lot easier to support people in this area.

So, it really starts during the interview and hiring process. Search for those who you feel would be a good fit for your practice based on the needs of your practice, as well as your values. And less about the hundreds of amazing trainings, approaches, or modalities that someone holds.

Something that I try to keep in mind whenever I hire someone is that often the person applying for the job is in a crisis or semi-crisis situation, and I do want to say I’m using the word crisis loosely, but what I mean by that is when people are actively searching for a job, they are usually applying for a job for one of three reasons. And two of those reasons I believe are either a crisis or semi-crisis situation.

First, they are currently working at an organization and they want to leave. Whether they’re feeling burnt out, whether they’re not happy there, whether they’re not getting their needs met, whether their values aren’t being followed. Regardless, they want to leave. So, they’re looking for another job to leave.

Second, they are searching for more clients or work to support their financial needs. So maybe their current role, job, or business is not meeting the financial needs that they need to support them, their family, and so forth. So as a result, they are just looking for additional income to support that need.

The final one, which is what we want people to apply for, but isn’t always the case, is it’s their dream job. That’s when we’re getting more into internal motivators, and we’re going to talk about that in a little bit. If it’s their dream job, they are a good fit, they want this job. The other two are what we call external motivators because they are motivated by something other than the position itself, they are motivated by leaving the organization that they’re in, or they’re motivated by the financial needs.

And because of this, the person is likely applying for multiple positions in multiple agencies just to find something that can support that income. And like I said, income is an external motivator, not an internal motivator. So as those hiring, it’s our duty to dig into the internal motivators of those that we’re interviewing and wanting to onboard. Which are the values, vision, and the type of work that energizes them so that you can determine if they are a fit for your practice mission, values, and vision. And whether or not this person would be a good fit long term for your practice.

Really, anyone can take a bunch of trainings and look really great on paper, but at the end of the day, you can train people and you can encourage them to seek other trainings. But what you can’t train is someone’s internal motivators and how the internal motivators fit within the needs and gaps your organization is looking to fill.

So anyway, I want to go back to reciprocity for a second. When we, as those hiring, ensure that we are searching for the best possible fit based on internal motivators, whether it’s their values, their needs, and of course the gaps within the organizations we’re trying to fill, the new hire is likely going to feel more fulfilled and motivated by the work and feel that they owe you.

And I want to give you a personal example. I currently do part time contracting work for a practice and I have been working for them for several years. Even though I’ve moved into business coaching. And at the end of the day, that’s where my passion lies. I want to be a business coach. I want to help other people grow their businesses. I still take on some work for this practice, even though I’ve stopped taking clients inside of my own private practice, so my own therapy practice, a while ago. Of course, I still take business coaching clients. And the reason I still work for this company is that I hold a lot of appreciation for this agency and feel a sense of reciprocity towards them. And I want to continue to work with them because they gave me what I valued when I first started. I can’t say how much appreciation I have for getting what I needed in the time that I got it.

And it’s no secret that when I first started my private practice, I’ve applied for several contract jobs, and only one, which is my current contract, offered me everything that I needed and that I valued. And that was autonomy, flexibility, and the ability to make my own schedule and work with the type of clients I wanted to work with, which is workplace stress and burnout. Because these were my needs and values at the time, and of course still are, I’ve held true appreciation when it felt like no other contract considered my needs. They just kind of considered their own. This practice did. And I want to be clear, I don’t think that it was the intention of the organization to say, “Hey, oh, let’s meet Kayla’s needs.” This isn’t what happened. But what it was is that their vision, values, and mission was highly aligned with my own. And at the end of the day, it was a huge success because I feel that I got what I needed. I hope they feel that they got what they needed. And that’s why I’m still here years later, even though I’ve stopped my own private practice. And still taking contracts because I hold that reciprocity factor.

So don’t underestimate the power of reciprocity because that can help you years and years in the future. Even if someone leaves your organization, they would still likely say good things about you and your company because you’ve treated them so well. The opposite can also happen. If someone is feeling resentful of what they have gotten, and even if you as a group practice owner provided everything that aligned with your values, is when we’re hiring, we want to make sure that we are hiring people based on how their values align with the practice’s values, not based on this is the training that they have. Because training can always be taken. You can’t change internal motivators. You can’t change people’s values. And the more you align, the more reciprocity you’re going to have into your practice. And the better organizational culture you’re going to have.

Ways to Maintain Fairness When Hiring Independent Contractors

So, there’s one more thing I want to touch on in today’s episode, which are the ways to maintain fairness when you’re hiring independent contractors, or even if you are an independent contractor. And through my work as a business coach, I’ve heard some common themes within our sector over the last several years, and I want to provide my opinions on these themes. Of course, at the end of the day, you run your own practice and have the final say in what you decide to do. And of course, as a therapist, you also have the power to not accept or accept whatever it is that you want to accept. But I hope that whether you’re someone hiring or someone that is being hired, that this provides some insight and guidance for you should these themes happen for you.

Pro Bono and Sliding Scale Services in Group Practice

So first of all, let’s discuss when a group practice provides pro bono and sliding scale services. As healthcare professionals and people who care about people that we want to give back in some form of providing free or discounted services to those who otherwise would have difficulty accessing such services. If this is important for you as a group practice owner and you want this as being a staple within your practice, it’s important to think about how you can do this fairly.

Unfortunately, I’ve heard over the last several years that many therapists across Canada and the States have been hired as independent contractors at a practice who then expects them to provide pro bono or sliding scale services. That they don’t get paid for, or they get paid significantly less than what they agree upon. And going back to resentment, there often is a little resentment there.

In my opinion, it is unfair to expect a contractor to work for free. And actually, if you had an employee and you told them you wouldn’t pay them for pro bono sessions, you’d likely be breaking some sort of employment standard regarding pay. Again, not a lawyer, not giving any advice, but it just doesn’t sit right, and people deserve to be paid for the work that they do. So why would we expect an independent contractor to also work for free?

But here are some ways that if providing pro bono or sliding scale is super important for you in your practice, these are some strategies you can incorporate so that you can provide these services fairly:

First of all, you can reach out to and ask a local university who trains either psychologists, social workers, or counsellors if they are looking for practicum students where you can train other future therapists the ropes of being therapists, and also provide them some great experience along the way while they actually work with your pro bono or sliding scale clients. This is a win-win situation because the students, they get experience and you get to follow your vision and mission.

The second is hire an employee to work with pro bono and sliding scale clients instead of a contractor. Of course, you’ll have to pay the employee, but the cost to the organization might be a lot less than a full split as per the agreement of the independent contractor.

Also, you can take on clients yourself. If it is ingrained in the fabric of your practice to provide these services, you might agree to take a couple of clients on yourself because it’s your value and your mission as the group practice owner. Now, I always want to give a little disclaimer here that you’re only one person and with managing the business and working with clients, it can definitely become overwhelming. But as a business owner who has other independent contractors working for you, you do have passive income coming into your practice because the split that you get from the independent contractors who you’re working with is going towards your business. So, even though you might not be getting paid for the specific session of a pro bono session or might be getting less paid for a sliding scale, you are in fact having consistent income as you have the other independent contractors working with paying clients that are bringing passive income into your practice. Typically, when you expect an independent contractor to work pro bono or a sliding scale, you’re actually taking away from their profit and your own. So that’s something to keep in mind.

The final thing, and this is a little uncomfortable for me, I’m not a huge fan of this strategy, but there definitely are ways around doing it fairly. When you’re hiring independent contractors, be open about your vision, your values, and your desire to provide pro bono and sliding scales inside of your practice. There may be something that you and the contractor can agree upon that’s fair for the both of you. and you’re providing informed consent about what the agency does. In saying that, remember that an 80/20 split of zero is still $0. So, asking people to do things for free is still unfair. And the other thing is even if someone says that they want to agree upon this, there may be some fear that they’ll lose the position overall if they don’t agree. So, they almost feel kind of this internal coercion to accept the offer, even if it’s something that they don’t have the financial capacity to agree upon. So really having some conversation around this and really being open to a dialogue with the contractor. You might even be able to come up with some sort of agreement of an hourly rate for when a contractor does a pro bono or sliding scale, providing that the sliding scale fee is lesser than they would get with the split. I mean, let’s be honest, most things are negotiable. But in saying that, as a practice owner, you want to create that sense of reciprocity over the sense of resentment. So, if you take this route, you should have multiple conversations and encourage true and authentic feedback. And not just assume that because providing such services is your vision or value, that it’s those of those you hire. And even if they would love to do it, it doesn’t necessarily mean that they are at a place where they can do it.

Going back to the passive income I mentioned earlier, you as a practice owner have passive income from other independent contractors coming in. The people that are working for you are likely working one-to-one and that is their income. So if you take an hour or two or even five a week or a month away from them for doing pro bono, that is one, two or five hours that they now can’t compensate for their future.

So really think about that, if you do want to provide this, I’m not discouraging it. But really think about how you can do it fairly within your practice.

Marketing to Get Clients into Your Practice

Another area I want to touch on is the marketing piece and getting clients inside the practice.

As I mentioned earlier in the episode, the basic benefit of joining a practice is that clients naturally are triaged to therapists. In my opinion, this is a given. However, I know that there are some practices that hire therapists, usually as contractors, on a split pay basis, but request or mandate that the therapist find clients to bring to the practice and then continue to give the practice a cut of profits.

Personally, I really don’t understand how this works, and in my opinion, I certainly don’t believe it’s ethical. Because if a person is getting hired to work with clients, the basic assumption is that the business finds the clients to work with them. Otherwise, the therapist might as well work inside their own private practice, so that they can keep the entire profit.

Also, when this is asked of an independent contractor, there’s an expectation for them to work for free when they are marketing, until they can actually start making a profit. Going back to the main point that I mentioned with pro bono services, I feel it’s unfair to ask anyone to work for free.

So, if you’re expecting someone to go out and market for you, to bring clients into your practice and then give you a split. My question is, what are you giving them for that split? And how is that fair that you’re asking them to market for free when the basic assumption is that you would be giving them clients?

So, this is just some thoughts. However, I do understand where this school of thought is coming from. It’s really to have more clients into your practice, and it’s not uncommon for us to hire marketing professionals or other people to do the marketing for us. We usually don’t expect them to do it for free. We usually pay them. But we do want continual clients coming into our practice.

But here are some suggestions on how you can market and increase your clients fairly.

First is hire a marketing strategist as an independent contractor on an hourly rate. Usually marketing strategists will have packages where they offer x amount of hours, where they help you get clients into your practice.

The other thing is you can hire an employee, whether they’re a therapist or not, who has guaranteed hours and they market during their hours of pay. So this way you can pay a little less because employees tend to be paid less than independent contractors because employees work within our business, whereas independent contractors are self-employed individuals. So as a result, they can do this during their time of pay.

You can DIY it. You can do the marketing yourself.

You can also pay for passive marketing for the therapist, such as therapist directories, or even have the independent contractors on your website with a book now option. This probably won’t get a substantial amount of clients because you still need other marketing to help, but this is definitely some ways to get a few more clients. You obviously, as a private practice owner, have to pay for these things and make sure that these are available, but they are a lesser cost overall.

And going back to the hiring contract again, if you are super clear about the expectations of the role and you compensate fairly and have it written in the agreement, it may be okay to ask this of someone. For example, maybe you agree with the therapist, they receive an 80/20 split on clients they bring into the practice, but maybe you only give them a 60/40 split for clients you provide them. But also you’ll pay them x amount of dollars per hour for their marketing time. So outside of the split you give them x amount of dollars for anything that they do to market. You ask them to keep track of those hours and then you pay them accordingly or something like that. Again, this is depends on if the independent contractor feels that this works for them and that it’s fair. So, this is where that negotiation piece comes in, and I’m sure there’s lots of other negotiation pieces you could talk about too. But at the end of the day, I think my theme is just being very transparent about what you expect your contractors to do and to compensate them fairly.

Conclusion

So, there you go. So, whether you’re a therapist looking to be hired inside of a group practice or you’re a group practice wanting to hire therapists, I hope you found value in this episode and it helped you better understand which classification to choose, how to identify a fair payment structure, and gain some confidence in contract negotiation.

If you can’t tell, I’m definitely in favour of the independent contractor route, especially when you’re starting off. But it does have some limitations, especially with ongoing consistency. So as a business grows, I personally love the employee route for more consistency and stability. So again, they both have pros and cons.

Thank you for tuning in to today’s episode and if you like this episode or the Designer Practice Podcast as a whole, I would really appreciate if you would share the podcast with a colleague or with someone in your own community so that other therapists and coaches out there can get all the juicy free content, too.

Until next time. Bye for now.

Credits & Disclaimers

Music by ItsWatR from Pixabay

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Reference

Canadian Revenue Agency. (n.d.) Employee or self-employed? Retrieved from https://www.canada.ca/content/dam/cra-arc/formspubs/pub/rc4110/rc4110-22e.pdf