Family ties: Making the office a relative matter

When R. Scott Springer, DO, came home one day a few years ago and told his wife, Michelle, that he wanted to start his own practice, she knew exactly who could help him run it.

Her.

A CPA with her own tax accounting practice, Michelle Springer helped her husband incorporate and set up his practice in a matter of weeks. Her initial work soon evolved into a full-time practice administrator position, which she still holds today.

"I knew Michelle wasn't going to do taxes her whole life, because it's just a grind," said Dr. Springer, a reproductive endocrinologist and infertility specialist whose practice, Center for Reproductive Health, is in Crest Hill, Ill. "This just kind of happened. It could be maturity or it could be necessity, but we probably get along better personally now than in our 20 years of marriage."

Employing a spouse or family member is a fairly common practice with physicians, especially ones in solo or small-group settings. There's something romantic about working with a spouse, sharing the commute and having offices a few yards apart, just like there's something comforting about knowing you have family members answering your phones, paying your bills and otherwise watching out for your best interests.

But not every couple gets along as swimmingly as the Springers. Health care consultants warn that employing a spouse or other family member can create problems. For starters, there's the possibility of damaging office morale and raising the question of favoritism among employees or physician partners.

Most employment situations involve a spouse, which often means employees effectively have another owner looking over their shoulders as they work. When household finances are on the line, it's not always easy for a spouse to be just another employee or an objective boss, consultants said. It's even tougher sometimes for spouses to delegate responsibility, and they might choose instead to do all the work because they doesn't trust another employee to do it correctly.

"My experience has been the spousal member tends to be tougher on staff," said Reed Tinsley, a health care consultant in Houston. "It can lead to dissatisfaction among the employee ranks."

It can lead to suspicion among partners, too, whether it's warranted or not. For example, if the physician whose spouse works in the office has the highest rate of collections, another doctor could easily assume that the spouse pressured staff to spend more time on that set of bills and neglect the other physicians in the practice.

Even if the spouse is the nicest person in the office and works in a distinctly lower role, other doctors still might be cautious in approaching him or her to perform an office task.

The stress of having a husband-and-wife team working together can sometimes get to the couple as well, consultants said. The bliss they share in their relationship might not transfer over to the office, and pretty soon, personal and business issues start to blend together into one big problem, consultants said.

"The doctor and spouse might not get along that well at work," said Mike Dejno, a consultant with Healthcare Management Consultants in Appleton, Wis. "Then staff is not sure who to turn to."

Vince Conner, a partner with ConnerWolf & Associates in Colorado Springs, Colo., said a solo practice could function well with an employed spouse, but when it's time to grow, his firm usually suggests that the spouse's role is diminished greatly or eliminated completely.

"It's one more complication" in the partnership, Conner said.

Reasons to try

In some situations, however, the spouse is simply the best candidate for the job. In smaller towns or rural locations, the pool of candidates may be shallow, and the spouse or another family member might be the smartest and most trustworthy person available.

A physician also might want to start a spouse on a retirement plan and create a history with Social Security. A spouse working for the practice also could enroll in the health insurance program and list the physician as a dependent, consultants said.

A physician's child working for the practice can earn up to the standard deduction -- which was $4,750 in 2003 -- without having to pay income tax, said Joyce Lundbom, a CPA and partner with Practice Management Services, an accounting and consulting firm based in Tucson, Ariz.

"As long as it's a valid employment function, it would give the child earned income, which can go into a Roth IRA," she said. "The rest would go into the child's hands, but it's still tax-free."

Even if the child earns more than the cap, the excess will be taxed at the child's rate, which will no doubt be considerably lower than the physician's tax rate.

When it works

Even if financial reasons seem compelling enough to hire a loved one, it still can be a dangerous move from an office perspective. Consultants say the best way to maintain harmony in the office is for the spouse to follow the same rules as everyone else, be fair with employees if he or she is in a position of authority and have an easygoing personality.

"Even if you don't work full time, you need to work a predictable schedule," Conner said. "What drives people nuts is when the spouse takes the attitude that they don't need to have regular hours."

The thought of working less than full time or applying a different set of rules to herself has never occurred to Michelle Springer, who often works overtime with her husband and, he says, "wakes up at 4 a.m. worrying about the practice."

When any employee has a family need, they let that person leave early without question, and the couple doesn't carry out any sort of important discussion -- business or personal -- in front of other people in the office.

The Springers' management style is as much a function of experience and personality as of their awareness of the office dynamic. Michelle Springer was cognizant of the stereotypes that are often applied to a spouse working for a physician, so much so that her initial lot of business cards had her maiden name.

"I'm committed to breaking that stereotype," Michelle Springer said. "If you're going to put yourself out there as a boss, it's tough to get their respect if you're sloppy in your own job."

The practice's successful course has proven Dr. Springer's clinical talents and his wife's business acumen. The practice has grown dramatically since Dr. Springer went solo about three years ago, moving to a new, larger office, adding another location, and opening an in-vitro fertilization laboratory. The new space was actually designed so that his and her offices are on opposite ends of the building, just to reinforce their business duties.

But beyond skill and expertise, spouses or family members also need an unassuming personality to blend well with the other employees, especially if he or she is not taking a position of authority. If the family member can't take direction or isn't willing to work as hard as others are expected to, he or she might not be a wise hire, consultants said.

Robert Kotler, MD, a cosmetic facial surgeon in Beverly Hills, Calif., hired his daughter, Lindsey, to run his small book publishing company, which uses the same office as his practice. When the practice gets busy with patients, his daughter is sometimes called on to help out, which she does without complaint, he said.

"The staff likes and respects my daughter," Dr. Kotler said. "They feel she could hold her position were she not my daughter. They also know I hold her to a high standard."

The unthinkable possibility

In practices where high standards are not set, or not met, there could come a time when a doctor has to consider firing a spouse or family member. The situations that have deteriorated to that point are easy to spot, consultants said.

Sometimes, the indicators are as obvious as the presence of small children in the office. Consultants described situations in which the wife would bring the kids in while she worked for a couple of hours, and then even leave them with another employee while going out to run errands.

Other times, the indicators are more subtle, like other employees finding new jobs or office efficiency grinding to a halt.

Conner described one situation where the different parenting styles of the physician-husband and office-manager-wife were evident in how they directed staff employees.

"She always set limits with the kids, and he would not," Conner said. "She would set limits with the staff, and he would actually challenge her and subvert her."

Situations can spiral quickly into an unprofessional climate if personal problems seep into the office, consultants said. The physician might share the blame or even be solely responsible for the problems, but the solution often is moving the spouse out of the office.

"You have to make a decision, but sometimes the marriage can be at stake," Lundbom said. "Sometimes it's hard to tell someone that. It's certainly important to try to get that resolved."