We therapists who are business owners juggle many roles and responsibilities. During times of stress, illness, or professional growth it is easy to neglect important areas of practice management.
While the following is not legal advise, as a business owner of 30 years, I wrote this blog as a gentle support for our community, myself included. When we do our very best to stay on track and on top of tasks, it helps to minimize what I call the “Uh Ohs”, “Oh Nos!”, and “Oh Crap!” parts of business life.
Let’s get started on the basics of practice management…
Thorough Client Intake Paperwork
Having a comprehensive client consent form packet is an important legal and ethical cornerstone for every clinician in private practice, group practice, or at an agency. Minimally your forms should include:
Your full name
Your Corporation/DBA (if you have a Corporation/DBA)
Your contact information
Your fee, including fee raises
Your cancellation policy
Limits of Confidentiality/mandated reporting responsibilities
Out of session contact
Best way to contact client
Best way for the client to contact you
A really good consent form packet will include all of the above, as well as:
A bio/psycho/social assessment
Letter Writing Request Boundaries
Social media policy
Your specialization or modalities
If you need a comprehensive informed consent packet, but don’t have the time, energy or inclination to write this, you can download that here.
Piercing the Corporate Veil
Many private practice therapists and/or sole practitioners eventually incorporate their practice, often to an S corporation. This is done for tax purposes, as well as a deeper level of personal property and liability protection.
However, many therapists do not take the time to fully understand what is required of them in supporting their corporation. As such, they may inadvertently put the corporation at risk, and if the corporation is sued, the court may decide to do what is called, “piercing the corporate veil.”
Though I am not an attorney, and this blog does not act as legal advise, in a nutshell this means that the owners, shareholders, or members of that corporation may be held personally liable for the corporate debts. Unfortunately this means that creditors could possibly go after the owners' personal bank account or retirement, or their home, or other personal assets if the owner of the corporation plays fast and loose with the corporate boundaries.
Though small corporations (for example, a S corporation owned by one therapist) are less vulnerable than larger corporations, it is always better to be safe than sorry and follow the rules that apply to all corporations (large or small) and comply with the laws in creating and maintaining a corporation in the United States. These are some of those laws:
A Corporation must hold annual meetings for the directors and shareholders or members (you can decide who those members are, for example a CPA, or a family member, mentor or colleague).
A Corporation must keep minutes of these annual meetings. “Minutes” are a detailed record of what was discussed.
A Corporation must always maintain its own bank account. This includes a checking, savings, corporate credit card.
The Corporation owner must never use the corporation account for personal use.
The Corporation’s owner must never deposit checks for the corporation in to their personal account.
The Corporation must pay its taxes and debts on time.
The Corporation must include the corporate designation on your materials and business cards (such as INC., LLC.)
Do not co-mingle personal and corporate earnings.
Make sure you have a reasonable amount of capital in your corporation. $500 is not often considered a reasonable amount of money.
While it can feel overwhelming to consider setting up and managing a corporation, take a deep breath and know that with the support of an expert (such as an attorney or CPA), proper education, staying organized, and upholding the boundaries between the corporate and the personal accounts, you can manage your corporation with confidence.
Note: As of this blog post a LMFT in California may not start an LLC. Additionally, always consult with a business attorney or CPA on legal advise regarding corporations. Do not rely on a well meaning friend, colleague pal, dear old dad, or even this blog. Consult with an expert.
This is a requirement for interns and licensed clinicians and should always be a task that one attends to each year. To avoid letting your liability insurance lapse, add a reminder to your calendar 3 months, 2 months, 1 month and 1 week prior to the due date.
I prefer to pay my liability insurance the week I receive the reminder. Yes, it is an investment that none of us really want to pay for, but it is an absolute must in private practice management.
And don’t forget, it is also a write off at tax time…so there’s that!
Being Prompt is Professional
This should be a no brainer, however, in our fast paced world with longer commutes than most people would like, you may find yourself zipping in to the office barely ahead of your client, or if you hit traffic, then you may find yourself running behind and showing up a few minutes late.
Or perhaps you struggle to end your sessions on time, especially with clients who are challenged by boundaries, attachment trauma, and other issues.
Sometimes arriving late is unavoidable, and sometimes running over the clinical hour happens, but that should be the exception, never the rule.
If you are chronically late, an easy fix is to arrive to your office 30 minutes early. When I began to practice this it took the pressure off if I hit traffic, and it gave me plenty of time to turn on the office lights and music, replenish the water, put my hand bag away, set up my laptop, use the bathroom, light a candle, and just center myself for the day.
Arriving early to your office allows you to respect your client’s time, your own time, and ease in to your day without feeling rushed and resentful. Practicing this will also help you maintain better boundaries with ending your sessions on time.
Charging Your Worth, On Time, Every Time
Most of us have a budget and your clients are no different. In order to respect your finances and their investment in to your business services, please charge or collect your client’s fee on the day you see them. This not only honors your time and clinical service, it also upholds a professional policy that fees are due at the time of service.
Of course life happens, and if your client forgets their checkbook (if that is how they pay), then set a reminder for yourself to collect their payment during the following session.
I am paperless and have been for many years, thus my clients pay via credit card virtually, no more checks to collect and process. They are charged the day of their session.
Find a system that works for your business. Then, uphold your policy and have a consistent payment process in place for your clients.
And, as a side note, please charge a fee that supports the valuable work you do, and then be worthy of that fee by staying on top of your education, your business, and your clinical support. Therapists struggle with scarcity mentality and imposter syndrome far too often. What you have to offer is an important service to humanity. Don’t forget that. You are worth every penny you charge. Believe that please.
Clinical Progress Notes
Let’s face it, we are not robots and there is not a therapist that I know (if they are being honest), who hasn’t fallen behind on clinical notes a time or three.
That said, this is not an area of private practice management that you or I want to slack off on. Our licensing boards expect that we will operate our practices and support our clients at the highest standard of care, and this includes timely clinical notes.
My policy is to get my notes done directly after my clinical sessions in between clients. However, sometimes that is simply not possible, and by the end of the day I am tired.
On those days, I set my alarm to wake up 30 minutes earlier the next day and do my notes first thing in the morning while my client sessions are still fresh in my mind. If, for whatever reason, I am unable to do this (due to an emergency or illness), then I carve out time over the weekend to catch up. However, this should not be a regular practice. And frankly, who wants to work on the weekends? Not me!
Having a simple note system in place, either through an electronic platform, or your own HIPAA compliant system, will help you stay organized and on top of this mandated task.
As the saying goes, “Don’t put off ‘till tomorrow what you can do today” – because you don’t know what tomorrow holds, and before you know it you’ll be not only days, but also weeks behind.
Bottom line: Don’t play fast and loose with client notes, our boards frown on that practice. Better to be safe than sorry.
Emailing and/or texting with clients
This seems to be an area that some therapists really struggle with. It is our responsibility as clinicians to know, name and maintain our out of session contact boundaries with clients, not the other way around. A client doesn’t know what they don’t know, so the onus falls on us as therapists to educate and inform the client on our out of session contact policy.
Here are my boundary rules:
1. Know: First of all, clearly understand what your out of session contact policy is. You must first be crystal clear about your boundary and why you have that in place (hint: confidentiality, appropriate client interaction, reducing liability).
2. Name: Once you are clear about your policy, you should state this in your forms. I would also add a short statement in your email signature as well. Be very clear on how you language your out of session contact so that the client is not confused, and so that you manage the client’s expectation that your support is available 24/7.
3. Maintain: Even when we know and name our boundaries, even when the client signs off on our out of session contact policy, there will be clients who attempt to push past our boundaries and policies depending upon what they are struggling with (i.e. anxiety, entitlement, a personality disorder, etc.).
When that happens, it is not up to the client to maintain your professional boundaries; it is up to you to maintain them. And consistency is key with boundary busting clients – be kind, be succinct, be clinical, don’t personalize, and uphold your boundary.
For example, if “Jane Smith” sends you a long email between sessions venting her anger and hurt toward her husband, and then asks for your “advise” (therapists do not give advise), you may want to consider responding something like this:
Given the situation you have shared, I hear that you are feeling (hurt, angry, shocked - repeat the words she has shared in her email) and I know this is a very challenging time.
Unfortunately, email is not the best forum to discuss therapy topics given that the Internet does not have a guarantee of confidentiality. Because of this, my policy is to support all clients within the secure space of the session.
However, if you are in crisis and feel that an emergency check in session is needed, I am able to make time on (day/time). Otherwise, I will see you next week in session. And of course, if you are feeling like this is a life-threatening situation, I want you to let me know and call 911 immediately.
If a check in session is not necessary at this time, and you are not experiencing a life threatening crisis, I encourage you to use the tools we have discussed, and practice gentle self care over the next few days.
Please know that I am holding healing and supportive thoughts for you and I look forward to processing this more fully in your session next week if a check in session is not needed at this time. “
A response like this validates her pain without offering clinical feedback. It also offers her an option for a check in session, and reminds her how to take care of herself if she is in crisis, and it gently points her to her therapy tools and self care. Finally, it offers a gentle non-shaming reminder of your policy and that email is not a confidential way of processing topics that belong in therapy.
If the client struggles in maintaining boundaries and continues to contact you, then the client may need a higher level of care. That is something that will need to be addressed in your work together, and documented in your clinical notes. And please remember to keep a record of your out of session contact with the client as well. If you want to tighten up your clinical forms, you can find materials to support this here.
Oh boy, this topic really sets my Mohawk on end. Suffice to say swiping (aka stealing) a colleague's intellectual property is not only uncool, it is unethical and often illegal.
Stealing website copy, and that includes tag lines, logos, and original sayings that are attributed to your colleague, memes they have created, photographs they have paid for, blogs they have written, podcasts they have been interviewed for or created, is not only a crappy thing to do, it is unethical and it is illegal to take another person’s intellectual property without their permission.
Again, it is illegal to copy and use:
Psychology Today profiles
Copy pages from a workbook for clients
Sharing or passing around materials you have purchased with other therapists
Presenting materials you have paid for as your own intellectual property
Taking photos, poems and other intellectual property without permission
Using a response on a listserve or social media as part of your book
While not illegal, these practices fall in to the unethical/not cool/ bad karma category:
Hearing about a colleague’s idea and then knocking off a very similar version
Swiping a phrase they use often and using it in your marketing
Creating identical marketing memes or materials
No one likes a copycat, and imitation is actually not the most sincere form of flattery. Rather, it is irritating, frustrating, and violating.
Trust that you have the creativity to be unique and original. And if you don’t, then hire someone to help you. No need to risk liability, or alienate your colleague by stealing from someone else.
Not a good look. Please don’t.
Lack of self-care
It is no secret that therapists experience burn out and compassion fatigue from time-to-time. However, because we are healers at heart, it can be difficult to know when we’ve reached the breaking point. Some signs to be aware of that you need a break:
Drinking more than you’d like to/Drinking and driving
Not being present in session
Letting tasks like note taking fall to the wayside
Lack of follow through
Somatic issues (headaches, stomach issues)
Taking short cuts
Staying in unhappy or abusive relationships
Working with clients that drain us or leave us feeing abused
Losing one’s sense of humor or joy
Continuing to work with colleagues or agencies that exhaust us
Given the complex and sometimes draining work that we do, investing in regular self care (and this includes doctors appointments and therapy as well) is incredibly important, not only for one’s health and well being, but also for our clients.
We cannot give from an empty cup, so putting yourself on the top of your “to do “list, and surrounding yourself with people who treat you well, is vitality important for you, your loved ones, and for a healthy practice.
Additional Income Streams
Most of my colleague friends and coaching clients know that helping others create multiple income streams is a passion and something that I enjoy and excel in. Here are a few reasons that creating passive and leveraged income streams beyond the 1:1 clinical hour is wise:
1. Helps to avoid clinical burnout
2. You are not relying on your clinical client income as your only income source
3. Passive income will allow you to make money while you sleep, while on vacation, or walking the dog. This can be achieved by writing a book, subletting your office, or creating an on line course
4. Work smarter not harder by leveraging your time. This can be done by starting a therapy group, creating a webinar, landing paid speaking gigs, or facilitating a workshop
5. Allows you to take more paid time off during the year
6. Allows you to explore other professional areas that you may be interested in
7. Allows your creativity to blossom
8. Allows you to start a savings plan and invest in retirement
If you’ve been thinking of creating an additional income stream, writing a book, starting a group, or creating a product but need some support in organizing and launching this, you are welcome to set up a coaching session here. You can also read what other therapists have to say about my support here.
Hiring 1099 vs. W2
While we clinicians must always adhere to our licensing boards law and ethics, the second and equally important lens a therapist will want to look through is their role as a business owner and operator.
A private practice is a small business and as such, has important foundational parts that must be attended to. We work hard for our licenses and so much has gone in to our practices/businesses that we do not want to play fast and loose with the IRS because, as the saying goes, Uncle Sam doesn’t play..
Here are a few key differences with respect to 1099 vs. W2 employees (for therapists located in the US):
have their own equipment
have their own unique business cards
have their own unique website
have their own unique email
set their own hours
choose the types of clients they work with
are paid by the project not the hour
set their own policies and procedures
schedule their time off and vacations as they wish
have other sources of income and clients
do not have a nameplate on the business owners office door
pay their own income taxes, and other tax related expenses
pay for their own training and CEUs
W2 employees often…
have equipment provided by the employer
have gone through an employment meeting
have gone over the employment manual with HIPAA guidelines (if you need this, you can find that here)
have the company’s business card with their name
are part of the businesses website
have an email with the business name
abide by the set hours of that business
agree to work with the clients of that business
are paid by the hour or another agreed upon pay structure
adhere to the businesses policies and procedures
agree to the hours assigned
submit vacation time for approval
Also, please be aware that there are forms that need to be in place when hiring, that you must have HIPAA training in place for W2 employees, that your advertising and interviewing process must not discriminate, and that you should have an employee policy manual that includes HIPAA information in place. If you need an employment manual, you can find that here.
It is also wise to have a payroll person, CPA, and employment attorney as part of your team if you manage employees.
Finally, we must all have our CEUs in place in order to renew our clinical licenses and often, our certifications as well.
Rather than resent the process of obtaining CEs, don’t wait until the last minute and frantically race around gathering them up. Instead, seek out fun and informative CE courses that are approved by your board. Maybe that is in art therapy, or somatic therapy, or EMDR, or some other area of healing that you have an interest in.
And make sure you get the correct number of legal and ethical CEs as well. Many courses are offered on line, but you can also schedule time for a conference you’ve been wanting to attend, or a workshop that seems interesting. Make it fun!
In closing, there are a lot of moving parts when managing a private practice/small business, however, once you have a system in place, it is not that difficult.
Have solid forms, stay on top of your notes, practice excellent boundaries with clients, don’t be a copy cat, get your CEs on time, keep your liability insurance up to date, designate your employees (W2 vs. 1099) appropriately, seek legal advise, seek the advise of a CPA, be on time, don’t gossip, be kind, practice self care, invest in coaching when needed, treat your colleagues with respect, create more than one income stream, pay your bills on time, manage your corporation legally…and, have fun!
Standing in support of your successful practice! Feel free to introduce yourself in the comment section below.
Mari A. Lee, LMFT, CSAT-S