64: Private Practice vs. Agency Work vs. Therapy Apps

 
 
 

Private Practice vs. Agency Work vs. Therapy Apps

Post last updated february 2024

Psychotherapists today have so many different options for how and where they want to work. Psychotherapists (social workers, professional counselors, psychologists, and the like) can choose to work outside of their traditional employment settings such as hospitals and schools. Through group practice, they can find employment, create their own private practice counseling business, or even join an online therapy app to provide services to clients over text and video. In this post, I'll share my (personal) opinions on the pros and cons of each of these three options.

Pros and Cons of Joining a Therapy Agency

The pros of being a therapist at a group therapy practice or counseling agency are numerous. Working at an established agency means a built-in referral stream, meaning it won't take long to get clients and build your way to a full caseload. You also aren't on the hook for the potential headaches that can come with signing a commercial lease. When you're at an agency, you most likely have an assigned office that you do your sessions in. You don't have to worry about contacting a landlord when something breaks or troubleshoot a leaky toilet. Most agencies also provide their therapists with start-up amenities, such as access to an EHR, phone service, email address, administrative or billing assistant, and a finished web page profile. Having other therapist friends around also means you might not get as lonely as you would if you worked in private practice or only on therapy apps. I worked at a group practice for years and loved it! It was a great blend of getting a feel for the business side of private practice while having additional professional support. I left for financial reasons that had nothing to do with the group practice owners or my former colleagues.

The disadvantages of a group practice or being a therapist at an agency are that you likely have less autonomy over the types of clients you see. Of course, pay is something to consider, too. Most therapist agencies give their contractors a fixed "fee split." In a fee-split model, the contracting therapist gets a percentage of what the full fee is. Usually, this a 60/40 or 50/50 split; the agency keeps 60-50% of the fee, and the contracting therapist gets 40-50%. This model is frequently used, and group therapy owners often use the language "that's just the way it is" when defending this fee split. The idea is that the contracting therapist has a lower risk of joining a reputable group and has access to amenities that they'd otherwise pay out of pocket if they were fully self-employed. 

I've heard horror stories of not choosing your own clients or being penalized for taking time off. When I was first considering joining an agency, two of the largest and most well-known in my area made all new contractors work evenings and weekends to start before "allowing" them to work more coveted times during the day. 

Finally, most positions at therapist agencies are contractural. Contractual therapists don't have access to benefits like paid time off, retirement matching/contributions, or health insurance. Those are things to consider as often the hourly rate will "look" better than traditional employment, but you miss out on some of the fringe benefits of working as an employee instead of a contractor. 

Pros and Cons of Therapy Apps

The benefits of working for Talkspace, BetterHelp, LemonAid, or any number of the therapy apps that are popping up are . . . well, I'm super biased here because I don't think they are many benefits, so I've dug up what these apps promise to their clinicians. Paraphrasing here, the benefits of joining one of the apps are: work flexibility, the ability to focus on the clinical part of therapy, no business overhead, and a supportive clinical community.

The disadvantages of online app-based therapy as a psychotherapist are that they woefully underpay their contractors. Most therapists sign the NDAs, but info from Reddit, word of mouth from friends who have been on the apps, and other sources have told me the hourly pay rate is in the $18-30 per hour range. Notice I said “hourly” instead of “BetterHelp salary,” that’s because there is no salary when working for something like Talk Space or Better Help; clinicians are paid per word since most are text/chat-based, which is then calculated into an hourly rate. Additionally, therapists are paid more the more clients they see, and they prioritize "quick responses" and text as the primary form of therapy. So while they promise flexibility, the way to make as much money as advertised is by working. A. LOT. and by being super available. These apps infuriate me because they treat highly trained psychotherapist's as "side hustlers." I don't know about you, fellow therapist, but I didn't do 6+ years of school, two years of an internship, pass my boards, and maintain my licensure to treat my career like a nighttime hobby.

I don't know about you, fellow therapist, but I didn't do 6+ years of school, two years of an internship, pass my boards, and maintain my licensure to treat my career like a nighttime hobby.

I can't listen to a podcast these days without hearing an advertisement for one or get on social media without seeing another huge celebrity endorsement. These apps are everywhere because they are funded by deep venture capital pockets that funnel a ton of money into marketing and celebrity partnerships. 

I heard Jeff Gunther of Therapy Den on my friend's podcast recently talk about something else I didn't know about these apps: data mining (Listen to the full episode here). My jaw dropped when I heard him say, "they take your data and sell it to Facebook, Google and Pinterest . . . the intake form is sent to advertisers that want to know more about you." I guess they get around HIPAA by de-identifying the data and selling the meta-data to advertisers. It's illegal (not to mention highly highly unethical) to share any of my client data with anyone else so I'm stunned that BetterHelp is getting away with this. Update March 2023! BetterHelp WAS sued for selling patient data and settled for $7.8 Million! The suit alleged that the app sold user’s medical data with third parties for profit, including Facebook and Snapchat.

This is yet another reason I won't be joining their app or any similar apps as a psychotherapist.

Pros and Cons of Private Practice Counseling

The pros of private practice counseling are that you are your own boss. You get to say "yes" to seeing aligned clients, "no" to clients who aren't a good fit, set your fees to ensure you can take care of yourself financially, work the hours you desire, set up shop in your home office or your hometown, and more! I'm biased, but I think there are so many pros to being an entrepreneurial therapist. I love getting to tap into the creative side of my mind and work on blog posts (#meta), podcasts, graphics, and videos for social media, and write emails to my newsletter list. As a private practice owner, I get to be CEO, CFO, and the head of marketing! 

The disadvantages of being a private practice owner are that you are your own boss. If doing it all sounds like a lot, well, it is. This is why I recommend paying for additional help as a private practice owner. That might look like upgrading different software platforms to make your life easier or hiring a virtual assistant or billing specialist to lighten your load. I wrote a guest post on Hold Space Creative’s blog on what to hire out or invest in if you are in private practice and are feeling burdened by the administrative side of things. 

It can be easy to slip from "work-life balance" into working nonstop when you are a private practice owner. Without someone nudging you to take time off or attend annual health appointments, you might delay some of those regular self-care items. In 2020 as a private practice owner, I only took eight days off (whoops!). I vowed never to do that again, but I doubt if I were traditionally employed, I would have felt guilty about taking time off or away from my clients. 

Where Should You Work as a Therapist?

Deciding on where you should work as a mental health provider is a personal choice. I'm obviously against Uber-ing yourself out on therapy apps, but for some people, having a little bit of money and not having to deal with the overhead or office politics is worth it. Here are the questions to ask yourself as you make your decision.

  1. How do I like to work? Alone with lots of autonomy? With lots of oversight and guidance?

  2. How comfortable am I telling others what I do for a living? Can I work on being in my growth zone when it comes to marketing my work?

  3. How important is flexibility to me? Am I comfortable setting my own vacation schedule? Do I trust myself to honor my energetic needs in my practice?

More Private Practice Help

I have a suite of mini courses designed to help you achieve your goals as a therapist in private practice. I decommissioned a group coaching program, but took the most popular modules and created self-paced workshops for you. Learn more about where to focus your time, how to take your private practice to the next level by going full-time, and how to create a sustainable marketing plan here:

 
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