The mental health industry is experiencing a significant shift as therapists increasingly leave group practices. This exodus is creating challenges for practice owners who struggle to retain staff and maintain quality client care. Understanding the root causes of this trend is essential for practice owners who want to build sustainable businesses that serve both their communities and their staff effectively.
Badass Therapists Building Practices That Thrive 156 Why Counselors Are Leaving Group Practices (and What Comes Next)
The Role of Fee Splitting in Therapist Dissatisfaction
Fee splitting arrangements stand at the forefront of therapist dissatisfaction. Many group practices operate on a percentage-based model where the practice takes 30–50% of session fees. While this structure itself isn't inherently problematic, the lack of transparency about where that money goes creates significant tension.
When therapists deliver 50 sessions at $100 each, and the practice takes 40%, they rightfully wonder what happens to that $2,000. Practice owners can help by clearly communicating how that money supports the business infrastructure, technology, marketing, and administrative support that makes their work possible. Regular meetings explaining business expenses and investments can go a long way toward building trust and demonstrating value to associates.
Insurance Clawbacks and Payment Delays: A Growing Concern for Therapists
Insurance complications represent another major pain point, particularly when it comes to clawbacks. When insurance companies retroactively deny claims and demand repayment, some practice owners pass this financial burden directly to their therapists.
This approach shows a fundamental misunderstanding of business responsibility. As Jennifer aptly compared in the podcast, Target doesn't ask its cashiers to cover customer refunds from their paychecks when merchandise is returned. Similarly, practice owners must absorb these business risks rather than offloading them to clinicians. Practices that make therapists wait for payment until insurance reimburses claims create unsustainable financial instability for their staff, virtually guaranteeing they'll leave when better opportunities arise.
The Problem With Overpromising Caseloads to New Hires
Perhaps the most damaging practice is promising full caseloads to new hires without having the marketing infrastructure or client base to deliver. Many practice owners, eager to expand, hire therapists with promises of referrals that never materialize. This leaves therapists with empty schedules and insufficient income, forcing them to leave for more sustainable opportunities.
The better approach is organic growth—expanding only when current therapists are at capacity and there's a genuine waitlist of clients. Building a practice should follow market demand rather than aspirational hiring that puts therapists in precarious financial positions.
Navigating Dual Roles: Supervisor and Practice Owner Ethics
The supervisory relationship adds another layer of complexity when practice owners also serve as clinical supervisors. This dual role creates a significant power imbalance that requires careful navigation.
When financial difficulties arise, practice owners who ask supervisees to accept delayed payment or reduced compensation damage not only the employment relationship but also the supervisory one. This can lead to ethical concerns, diminished clinical growth, and ultimately, the loss of associates who feel exploited rather than mentored. Practice owners in supervisory roles must take additional precautions to maintain boundaries and ensure their associates feel supported in both their professional development and financial wellbeing.
How to Build an Ethical and Sustainable Group Therapy Practice
Building an ethical group practice requires patience and strategic planning. Instead of starting with a full staff and minimal clients, successful practice owners begin as solo practitioners and add clinicians only as client demand exceeds capacity. They seek business guidance from resources like Small Business Development Centers, Chambers of Commerce, and even business owners in adjacent industries like massage therapy or salon services. Most importantly, they recognize that their success depends on creating workplaces where therapists feel valued, fairly compensated, and professionally fulfilled. The return on this investment comes through staff retention, positive word-of-mouth, and ultimately, a thriving practice that serves its community for years to come.
Action Items
- Feeling the weight of client care? It’s time to build a sustainable, joyful practice. Check out our free 1 CE workshops on topics like burnout prevention and boundary-setting created by therapists, for therapists.
- Craving more behind-the-scenes wisdom? Grab the guide and get unfiltered stories, practical tools, and must-know updates for life in and beyond the therapy room.
Blog post by Kate Walker, Ph.D., LPC-S, LMFT-S Creator of Texas’s first fully online 40-Hour LPC/LMFT Supervisor Training Course.