How Are Disability Lawyers Paid?

There is an extremely common misconception that lawyers profit from increasing the length of their clients’ cases. Many people feel that they should never hire a lawyer because the fees will be too expensive and the lawyer will take “all” their money. While this statement may be true about a small number of practices or lawyers, it is a very generalized statement that is typically false. People often have the misconception that lawyers are greedy simply because they do not understand how lawyers are paid. "Wallet with money"

Disability lawyers do not charge up-front fees. They are also not allowed to charge “whatever they want” for their legal services. The Federal government has regulated a very specific payment process for disability lawyers. This structure is called a contingency free structure, meaning that if you don’t receive any money, neither does your attorney.

After you have hired a disability lawyer, you are required to sign a fee agreement that legally allows the SSA to pay your lawyer if your claim is approved. This fee agreement must follow specific guidelines and must not exceed the maximum fee amount, discussed below.

Fees for disability lawyers

Because disability lawyers do not charge up-front fees, virtually anyone is allowed to hire the “best” legal representation. Social Security disability lawyers are entitled to a payment of up to 25% of the past-due benefits you are awarded or $6,000, whichever is less. If you are approved for benefits, the SSA will calculate the amount of past-due benefits (or “backpay”) you are owed. If you do not qualify for these retroactive benefits, your attorney is not allowed to charge a fee out or collect money from your regular payment.

An applicant becomes eligible for past-due benefits if the established onset date (EOD) of their condition is prior to the date they applied for disability benefits.  Again, a disability lawyer who is unsuccessful at securing you past-due benefits for your disability will not be able to charge a fee for their legal services. If an attorney does secure your retroactive benefits, however, you will owe them the value of their fee. Typically, the Social Security Administration will remove the value of your attorney’s fee from your first disability check and send the value directly to your lawyer. The SSA will then send the remaining value to you. This ensures your lawyer is paid on time and eliminates the need for you to send an additional check when you receive your first retroactive payment.

“Other” fees that may occur

It is important to be aware that you cannot hire a disability lawyer without having to pay some legal fees up frong. In order for a law firm to help you win your case, they will need to incur costs early on in the process. For example, disability attorneys typically have to acquire previous medical, school, and work records, as well as medical or psychological tests. Other, smaller costs may include charges for paper copies and postage and mailing supplies. These expenses must be paid in addition to any attorney’s fees, and they must be paid regardless of whether a case is won or lost.

Fair representation

As your attorneys, it is our job to fairly represent you and help you receive your benefits—not to keep those benefits for ourselves. The government keeps attorney’s fees low so you can hire the best representation possible and collect the money you deserve.

Photo Courtesy of 401(K) 2012 and Creative Commons.