Due diligence on a speech-language pathology practice

A speech-language pathology practice’s books can look strong while hiding the two things that actually decide whether the deal holds together after closing: whether its institutional contracts survive a change of ownership, and how much of its caseload really depends on the person selling it. Due diligence needs to test both directly, alongside the clinician and file-transfer questions specific to this sub-sector.

Audit every institutional contract for assignability

Pull every school-board or early-intervention contract and read the assignment clause specifically — does it transfer automatically on a change of ownership, does it require the board’s or program’s consent, and how much of the contract term remains. These contracts run under provincial education or children’s-services procurement rules, not health regulation, so the process and timeline for consent can differ meaningfully from what you would expect in a purely healthcare context. Start that conversation as early in the process as the seller allows, since a slow or reluctant counterparty can leave you closing on a practice worth less than what you agreed to pay for it. Ask specifically about the tender cycle — when the contract next comes up for renewal or re-tender — since a contract with two years left behaves very differently from one due for re-tender shortly after closing.

Break down the caseload by clinician and by referral source

Request a breakdown of revenue and caseload by treating clinician, not just a practice-wide total, so you can see how much is genuinely tied to the owner personally versus distributed among other clinicians. Ask for referral sources to be documented by physician, educator or daycare and early-years centre where possible, rather than accepting a general description of the referral network — a documented, traceable referral base is a materially more reliable asset than one the seller can only describe from memory.

Recast the earnings against actual collections, not billings

Compare what the practice billed against what it actually collected, since a gap between the two is a more honest picture of revenue quality than the billed total alone, particularly on private-pay paediatric work where a family’s ability to keep paying can change. Where the practice bills extended health benefits, spot-check remittance records against the practice’s own reporting rather than accepting a summary figure, and look for accounts-receivable concentration in a small number of families or institutional payers, since a receivables base that depends heavily on one or two sources is a different asset than a broadly distributed one even at the same total value.

Review clinician contracts and non-solicit provisions

Contract clinicians can typically leave and take a meaningful share of their own private caseload with them, so review what, if anything, actually restrains that — bearing in mind that non-solicit and non-compete enforceability against regulated professionals is a genuinely unsettled area that varies by province and by how the clause is drafted. Ask directly which clinicians know a sale is underway and what their intentions are, rather than relying on the seller’s general assurance that everyone is staying.

Confirm college standing and test the file transfer

Confirm directly with the applicable provincial college that the practice and its treating clinicians are in good standing, with no unresolved complaint or condition, rather than taking the seller’s word for it. Separately, test — do not assume — that client files, assessment and treatment plans can actually transfer to you in usable form and with proper consent, since incomplete records or a missing consent framework can leave you unable to service the caseload you are paying to acquire. Where paediatric files require parental consent to transfer, confirm how that consent will actually be obtained and by whom, since this is a step that takes real time and is easy to underestimate.

Teletherapy platform and software due diligence

Where the practice runs a teletherapy platform or client-management software, confirm who actually owns the licence, what it would cost to keep running or to migrate, and whether client data held in it is portable to a system you plan to use — a platform that turns out to be non-transferable or difficult to migrate is a cost you should know about before you close, not after. Ask the vendor directly, in writing, rather than relying on the seller’s assumption that the migration is straightforward.

Findings that actually kill these deals

• A school-board or institutional contract that does not renew or transfer under new ownership
• Several contract clinicians confirm they intend to leave and take a material share of the private caseload
• The paediatric referral network turns out to run through the owner personally, with nothing documented
• Client files cannot transfer cleanly because consent or privacy requirements were never properly addressed