Social Security Proposes Rule Change. Admits Law Firms exist!

In a recent regulatory proposal, Social Security finally (forced by the courts) admits what many of us knew to be true in our hearts: Law firms are real, and Social Security law firms often use more than one person to help represent someone filing for benefits.

I know I know. This doesn’t sound like something that seems like it needs a regulation to confirm. But, the reality is that Social Security has never acknowledged the existence of law firms.

Instead, Social Security only recognizes individual representatives (attorneys or non-attorneys authorized to represent claimants). When a law firm has more than one representative help on a case, each individual attorney has always had to be appointed individually by the claimant. Even sillier, at the end of that case, when the work has been done and a fee is earned – even if all of the attorneys work as part of the same firm and collaborated like most teams do to win the case – Social Security will split the fee into equal separate payments for each individual attorney. The fact that most attorneys are employed by law firms and paid for their effort, rather than relying on each individual fee earned has no impact on this accounting nightmare.

Even funnier – Social Security only does this when the attorneys work together as part of a single firm. If two attorneys who are not part of a law firm collaborate on a case, Social Security will not approve the fee agreement between the attorneys and the client, and instead, require each attorney to itemize their time separately, bill for their time, regardless of the agreement for a contingent fee between the client and the attorneys. This also means that even though most attorneys represent social security claimants on a contingent basis (meaning we don’t charge a fee if we don’t win), Social Security can backdoor an attorney from a separate firm into charging for time spent on a case regardless of the outcome. While many many attorneys charge on an hourly basis, and there is nothing wrong with that model, it’s not what most Social Security claimants expect, especially when they are understandably out of work and out of funds.

What’s in the proposal?

The proposed regulation acknowledges that law firms are real, and finally permits salaried attorneys who work together in the same firm to assign fees to the law firm itself, which is what most claimants think is happening when they hire a law firm that is more than one person to help them anyway.

The reality is – teams are better for claimants. Would you rather…

or…

Teams help work get done, that’s why we work together when we do important work. Who is going to call medical providers every single day? Is it the same person on the phone with a Social Security adjudicator going over limitations? What about the attorney writing a brief, or preparing a client for their hearing so they can present their case the right way the first time? It doesn’t make sense to believe that one person does 100% of the work to help someone win a case. Social Security has medical consultants, adjudicators, benefits authorizers, phone support, judges, clerks and paralegals, receptionists and vocational experts all working to evaluate claims. Law firms even those odds and give claimants a team behind them. So, sure, it’s great that Social Security is finally proposing regulations to admit that, yes – law firms are real.

Room for Improvement

I submitted comments to the proposal. While I am generally a fan, I’m hoping that Social Security will use this opportunity to make it easier for additional attorneys to agree to be bound by the agreement the client signed with the law firm, and that they will formalize their electronic signature process – something that became critical during the pandemic, and makes it easier for disabled workers to access legal services without having to drive to an office. Overall, the changes are good, even if it is another example of a government agency moving way… too… slowly.