Most Social Security disability lawyers work on a contingency basis, meaning if you do not win, you do not pay. Rather than billing by the hour or by appointment, or charging an upfront retainer, Social Security disability attorneys collect a percentage of your back pay once you get approved for benefits. If you do not get approved, your back pay is zero, which means, theoretically, your lawyer also should receive zero.
But you need to scrutinize your fee agreement before hiring a Social Security disability lawyer and understand how a social security disability attorney gets paid. Otherwise, you might end up saddled with an assortment of fees, even if Social Security denies your application. These fees are known as incidentals, and some lawyers charge them win or lose.
How Social Security Lawyers Get Paid
Nearly all Social Security disability lawyers charge contingency fees. In other words, the attorney’s fee is contingent upon winning your case. Hiring a lawyer on a contingency basis rather than paying by the hour removes the risk of paying for nothing. It also prevents you from having to come out of pocket at any point, as the lawyer does not get paid until the case settles, at which point they deduct their fee from your winnings.
Social Security limits the percentage of your award that your lawyer may collect. As of 2018, your disability lawyer is allowed to charge a maximum of 25 percent of your Social Security back pay, up to a limit of $6,000. So if your disability award is $1,000 per month, and you receive ten months of back pay, the most your lawyer may charge as a contingency fee is $2,500.
The Social Security Administration (SSA) allows disability lawyers to collect contingency fees only from back pay and not from future monthly benefits. Returning to the above example, which means your $1,000 per month disability benefit going forward is off-limits to your attorney.
Exceptions to Limits on Attorney Contingency Fees
The SSA allows for exceptions in a couple of rare and extraordinary circumstances. One, your case is unusually complex, and your lawyer feels they worked far above and beyond what is reasonable and customary for a Social Security disability case. The lawyer may petition the SSA for the right to charge more than 25 percent. For such a petition to be successful, your lawyer must submit compelling evidence of the substantial time and effort they put into winning your disability claim, and you must agree to the extra charge, as well.
Two, you hired one lawyer, then replaced that attorney midway through the process with another lawyer. In this scenario, the first lawyer might demand payment, citing the work they put into your case up until you fired them. The SSA has the latitude to allow the two attorneys to split a higher total contingency fee. So, for instance, instead of paying 25 percent of your back pay to one lawyer, you might reach an agreement with both lawyers to pay a total of 30 percent — 15 percent to each.
What You Need To Know About Incidental Fees
Incidental fees refer to the expenses a lawyer claims to have incurred in the process of fighting your case — costs for things like medical records, expert witnesses, travel expenses, administrative fees, and the like.
Social Security allows lawyers to pass these expenses to clients. Incidental fees do not count against the statutory limit the lawyer may charge, but are extra. Many lawyers waive incidental fees and absorb expenses if a case is unsuccessful. But others do not and require clients to pay them, win or lose.
When you hire a Social Security disability lawyer, they will present you with a fee agreement, and this document will stipulate the handling of incidental fees. Be sure to read it carefully — even the fine print, even the print that requires a magnifying glass to make out — before you sign your name to it. If there is any part you do not understand, or if any part confuses you, ask for clarification.
If you sign a fee agreement stating you will be charged for incidentals even if you lose the case, and you subsequently lose the case and get charged for incidentals, you will have little choice but to pay what you agreed to. The good news is, many lawyers will waive these fees if you ask. But you must clarify this issue upfront before you sign anything and before the lawyer begins work on your case.
Free Case Evaluation at the Law Offices of Ogle, Elrod & Baril, PLLC,
The attorneys at the Law Offices of Ogle, Elrod & Baril, PLLC, want to help you fight for the disability benefits you deserve. We offer a free consultation and case evaluation. To schedule an appointment, call our office at 1-866-628-8179.