Creative Partner Rebecca Newman practices law at Newman & Newman, P.C. in Boston.
Virtually Here: What are the main areas you help small businesses in?
Rebecca: The practice does some small businesses advising and helps people get everything started, incorporating and explaining the whole process of creating an entity like an LLC or a corporation. We advise clients to make sure that they follow all of the requirements whether that be the filing they have to do, how to do their taxes…I don’t directly advise on tax matters because I don’t know them all but I certainly tell people that they should speak to an accountant when we talk about tax related things.
I would say one of the central focuses that I’m involved in is when a client just started the business or if the business has just become successful or something and they want to, at that point, be formalized, I’ll tell them the pros and cons to being a corporation versus an LLC, what the differences are and—particularly in the small business context—explain why at the end of the day, the cost of being a corporation versus being an LLC are pretty much equal, but there are some reasons why you might want one over the other.
VH: Newman & Newman is a family practice.
Rebecca: My father and grandfather started the practice in 1978. I’m the first female in the third generation of lawyers, before it was only my dad, his father and then my granduncle. And now, it’s just me and my dad, and it’s been five years.
I think I was sort of genetically predisposed to being someone who, a): likes to fix problems for people; b): to argue, and/or debate and also I find it satisfying to express myself in writing. When I went to law school, I knew almost immediately it was a perfect fit for me.
VH: What aspect of your job do you enjoy the most?
Rebecca: Going to court and arguing motions. I think motion practice in court is even better than trials; I prefer to argue questions of law. Instead of having a witness on the stand during the trial, I argue the legal points with the judge and the opposing lawyer. But trials are probably second. With motions, the court has to rule on an issue of procedural law. Did I file something on time? Did I properly serve it on the opposing parties? Did we do discovery properly? So all those things are procedural and a lot of the times that’s where motions are involved.
VH: Jacqui (Virtually Here’s founder/owner) mentioned that you go back a long way.
Rebecca: Jacqueline was my very first friend. When we were babies we went to nursery school together because our mothers both worked at the same hospital in Belmont and they had a staff day care center. Actually, because Jacqui was born in the end of 84 in October she was in the younger group than I was there, and I happened to be the first graduating class of the nursery school! Yeah, Jacqueline and I go way back, we go back to the 80s.
The best story I could tell you is that during one of our sleepovers, at three in the morning Jacqueline woke up and she packed her Barbie suitcase, wheeled it into my parent’s bedroom where they were sleeping and said, “I’m ready to go home now. Can you call my mom and have her pick me up.” And my mom said, “No. Go back to bed.” That’s a good story.
VH: What other services do you provide for small businesses?
Rebecca: I do a lot of agreement drafting. I also review agreements that have already been written and advise on whether or not changes should be made, and if so why and where. And then, I do a lot of explaining about employment stuff so specifically I would say, I try to help and advise them of what things to be careful of in terms of discrimination laws. In terms of withholding, paying wages properly and payroll related issues, how to compensate your employees in accordance with the very specific and very hard to understand Massachusetts Wage Act.
And then, on top of all that I frequently explain the difference between in an independent contractor and an employee and how the courts, the IRS and the DOR answer if someone is truly an independent contractor and therefore properly classify them as such versus an employee.
So I would say those are probably the main things that I do with small businesses; that and if there is ever issues with non-payment—I’ll send a letter saying that you’re behind on your payments and then from there either file a lawsuit or try to settle the case.
Another focus is permitting. So if a business needs a liquor license or city or town authorizations, be that a liquor license or some sort of operating license I’ll help with that and I also handle cases dealing with professional licenses like nurses or construction workers and issues with their licenses.
VH: Are there issues specific to service providers?
Rebecca: I think the major concern for service providers is that while a service provider may say, I’ve done everything you’ve asked me to do and created the product that you wanted or provided the service that you asked for and we agreed to, and the customer may not be satisfied or may disagree. Those disputes are pretty challenging in a way because what someone’s says was compliant within an agreement or its performance of an obligation under a contract, the customer may disagree with the quality of that.
So, if you have an agreement with your client that you’re going to provide them with a flower arrangement every week or something… I have a client who owns a couple of flower stores and he has customers who have regular needs, like restaurant customers who want him to go and put flowers every week in the restaurant or in the hotel. And sometimes they’ll get upset and say that the delivery of the arrangement this week is ugly, and I’m not paying you for it. And that is a qualitative analysis of what my client as a service provider has done and while he may say that he thinks they’re beautiful, the client may disagree so that’s where it can get difficult.
VH: Could service providers get into less trouble if they made more specific agreements?
Rebecca: The problem is that it’s sometimes difficult for both the client and the service provider to perfectly articulate what they want and to explain every detail, their expectations or their goals in the body of the agreement. I’m sort of in the school of thought that simple is better, but I also tend to over complicate. And so, I also fear that if something is not included in the language of the agreement that that will ultimately create problems.
So I try to make contracts as specific as possible but that also sometimes can be the problem itself. So if I engage in a specific situation in one where we’re doing a contract, to decide whether it will make more sense to have less detail in the agreement and let the client and the customer hash it out at the time or if it’s more useful for a specific scenario to have a very detailed agreement. That’s something that I do it on a case by case basis. But it is definitely something that is a focus of work with small businesses or service providers because that’s probably the main issue that comes up is an unsatisfied customer and whether or not the agreement has been performed fully and if there’s a discrepency between what the contract said and what was provided.
VH: When someone comes to you for legal help, what are the questions that they don’t realize they need answers to?
Rebecca: One of the main ones is; are they properly classifying their workers or the people who help them operate the business as employees and independent contractors, as the case may be—because that’s the big one where people don’t realize they could risk exposure down the road to the tune of a lot of money if they misclassify their workers. There’s about 25 factors to consider when determining that question and people don’t often understand that just because the worker agrees that they want to be an independent contractor—for whatever reason, they want a 1099 instead of a W2, they want to work with other companies as well and don’t want to be exclusive to the service provider or something like that; none of that really matters when you read the factors, so that’s a big one.
I would say that another thing is whether or not they are doing the small things that make sure that they don’t compromise their limited liability protection. Using Jacqueline as an example, she has Virtually Here as an LLC. LLC stands for limited liability company. What that does is it creates an insulator between her personal income and money and assets and livelihood and the business, so if someone were to sue or a creditor goes after the business, they can only look to the LLC itself. But if the owner of that LLC, in this case Jacqueline, doesn’t keep the money separate in a Virtually Here bank account, if she doesn’t treat everything as separate in her operations, then potentially she could personally be on the hook for any debts and lawsuits and things like that. That’s another big one to watch out for that I warn people about.
Another one is whether or not any copyright or intellectual property laws are implicated by whatever the person is doing, whether that’s their logo or their name. That’s another thing that superficially I help with, but if it’s something more complicated I would refer them to an IP specialist, an intellectual property lawyer—because while I took the class, it’s a very different body of law that I don’t consider myself to be an expert in.
Another one to consider is whether they’ve registered the business. There’s various methods of doing that and if you can do it locally then you should; you can do it and sort of expand outwards, you can do it at the state level and more. And all of those provide protection for your ideas or your name. So yeah, there are different levels of protection that you can get.
Another big one is, if people have employees, how they do their payroll stuff over time and withholding and deductions, proper deductions and all that. That’s a good list, I think.