Taye Barrow, M.D., and James Robbins, M.D., are sole owners of two medical practices that...

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Accounting

Taye Barrow, M.D., and James Robbins, M.D., are sole owners of two medical practices that operate in the same medical building. The two doctors agree to combine assets and liabilities of the two businesses to form a partnership. The partnership agreement calls for dividing income equally between the two doctors. After several months, the following conversation takes place between the two doctors:

Barrow: Ive noticed that your patient load has dropped over the last couple of months. When we formed our partnership, we were seeing about the same number of patients per week. However, now our patient records show that you have been seeing about half as many patients as I have. Are there any issues that I should be aware of?

Robbins: Theres nothing going on. When I was working on my own, I was really putting in the hours. One of the reasons I formed this partnership was to enjoy life a little more and scale back a little bit.

Barrow: I see. Well, I find that Im working as hard as I did when I was on my own, yet making less than I did previously. Essentially, youre sharing in half of my billings and Im sharing in half of yours. Since you are working much less than I am, I end up on the short end of the bargain.

Robbins: Well, I dont know what to say. An agreement is an agreement. The partnership is based on a split. Thats what a partnership is all about.

Barrow: If thats so, then it applies equally well on the effort end of the equation as on the income end.

Discuss whether Robbins is acting in an ethical manner ?

How could Barrow renegotiate the partnership agreement to avoid this dispute?

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