17.2 Business Considerations in Private Practice
Business Licensure
Before practicing independently, a counselor must ensure they have the appropriate legal permissions to render services. In the present landscape of American business, this involves the creation of a business entity in which services are rendered to ensure appropriate taxation of services and recourse for clients and/or other business entities in the event of malpractice or outstanding debt. Business entities include a limited liability corporation (LLC), professional limited liability corporation (PLLC), or sole proprietorship, among others. Individuals should consult with legal representatives and financial advisors or accountants to determine the best route for incorporation when entering private practice.
Malpractice Insurance
Though counselors have legal protections relating to decisions made in good faith, legal malpractice lawsuits remain a possibility for all healthcare professionals. Even if no wrongdoing is found, the financial costs of hiring an attorney to defend oneself can be astronomical. Malpractice Insurance is a form of financial protection that assists the counselor in paying part or all of the expenses incurred due to professional malpractice lawsuits (Kagan, 2023). We believe all counselors, including student counselors in direct practice, should carry malpractice insurance, even if their particular state or agency does not require it.
Office Space and Contemporary Co-Working Practices
When providing in-person counseling services, it is necessary to provide a safe, comfortable, and confidential environment where clients can present for services. While an in-depth exploration of various organizational structures in private practice is beyond the scope of this text, a few considerations are relevant. When more than one counselor shares the same office space, it is essential to maintain client confidentiality. Clients should not be able to hear the content of therapy sessions from the waiting room, and it should be specified in the informed consent process whether or not all professionals at the practice will come into contact with client records. Similarly, some larger private practices manage client records and appointments through a non-clinical administrative staff member or third-party company. When this is the case, it is essential to communicate to clients in a “Notice of Privacy Practices” document how their data will be shared with administrative staff, as well as ensure that any non-clinical staff members are adequately trained in applicable state and federal laws regarding the storage and maintenance of medical records.
NAADAC (2021) addresses this:
“Addiction professionals shall discuss confidential client information only in locations where they are reasonably certain they can protect client privacy” (Standard II-12).
For additional details and information on privacy and confidentiality when engaging in distance counseling, see Chapter 7 on privacy and confidentiality and Chapter 13 on technology and distance counseling.
Key Takeaways
- Business licensure is a critical step for independent counselors, requiring the establishment of an appropriate business entity, such as an LLC or PLLC, to ensure legal compliance and protection for both the counselor and clients.
- Malpractice insurance is essential for all counselors, including students in direct practice, providing financial protection against the significant costs of defending malpractice lawsuits, even in cases of no wrongdoing.
- Office space practices must prioritize client confidentiality and comfort, with clear communication about how client data is managed, particularly when shared spaces or third-party administrative services are involved.