A psychology practice can choose to have a service agreement with psychologists renting room and operating out of their practice. Both the psychologist and the practice benefit from this structure. The psychologist can access admin and accounting support while the practice can have a number of different and talented psychologists sharing the space, without having the obligations of an employer.

What is a Service Arrangement?

When setting up a practice that allows for room rental and a service arrangement, you should first consider the amount of control you want to have over the psychologist’s work. This may determine whether your situation is better suited to an employee/employer relationship. 

If after receiving accounting and legal advice you decide a service arrangement best suits your practice, you will then need to draft your agreement.

The service agreement will set out the terms and conditions on which you will provide the services to the psychologist as well as some of their obligations in receiving the services and dealing with clients. Typically, the agreement should cover the following services:

  •    room rental
  •    booking of client appointments
  •    secretarial support
  •    materials and resources
  •    software and CRM
  •    training
  •    printing, copying and faxing

What Should Your Service Agreement Cover?

Term Description
Fees Fees payable per hour for the above services
Clients Engagement of clients, file management and ending client relationships. Consult with your particular state or territory body to ensure you comply with any specific requirements around transferring clients and client files.
Psychologist’s Obligations Psychologist’s obligations in receiving your service (e.g. minimum requirements regarding qualifications, use of systems such as admin support or resources, agreeing to work with you and resolve disputes, complying with work health and safety and other obligations when using your services).
Insurance and Super Who is covering what type of insurance. You should confirm the minimum requirements for the psychologist, in regards to their professional liability insurance and you can request that they have certain cover when providing services through your practice. It is important to make clear what you will and won’t be responsible for to protect your business.
Non-competition This clause should address non-competition and non-solicitation of both clients and your staff. Ensure you also include a reasonable restraint period and area. It’s prudent to consider the nature of the services you are providing (e.g. different specialities) and how a competing business may affect your business.
Confidential Information Set out the confidentiality obligations around both clients and personal information, as well as the business’ confidential information that the psychologist can access. Importantly, ensure the psychologist using your practice’s services does not take the confidential information they have had access to and then use this to set up their own practice.
Intellectual Property As the psychologists are using your services rather than being employees, it will not be assumed that the intellectual property they create while working through your practice will be assigned to your practice. If you would like this to be the case, you will need to include this in your agreement. If you provide any templates or support materials to the psychologist, you should make clear that you are licencing this material to them solely for the purpose of allowing them to receive the services.
Termination Include a clear termination clause so you can end the relationship with notice (e.g. 30 days). You should also consider the effect on the clients within the practice, and include specific clauses about what will occur on termination of the agreement. This clause should also include the process for returning confidential information and intellectual property on termination of the agreement

Key Takeaways

A room rental and service arrangement between a psychologist and your practice can be a great way to set up your business. It can provide flexibility and benefits for both parties. If you have concerns about how to structure your arrangement, and so that you do not fall foul of the law, you should speak with a contracts and employment lawyer who can assist you through the process. Get in touch on 1300 544 755. 

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