In most cases, a Social Security disability attorney’s fee is limited to 25% of the retroactive, or “past-due” benefits you are awarded. This fee is “capped” at a maximum of $7,200.00, so the fee is whichever is less: either 25% or $7,200.00. There is no minimum fee.
You usually don’t have to pay anything upfront to a disability lawyer. Instead, any fee is paid out of the back benefits you receive. Usually, Social Security handles the payment of fees directly, withholding the money from your backpay award, and sending the remainder to you.
Are there exceptions?
Yes. While Social Security always has to approve any fee between a lawyer and a disability client, there are a few situations when the fee may be different.
- If more than one social security disability lawyer has worked on the case, for example, you have fired a previous lawyer, or the lawyer withdrew from the case and you hired a new lawyer. If the first lawyer did not waive his or her right to a fee, both disability attorneys will have to file a “fee petition” with Social Security. This fee petition requires the social security disability attorneys to itemize the work they performed on the case and to request a reasonable fee for that work. Most attorneys will send this proposed fee petition to you for your review and approval or comments. If you agree that the fee is reasonable, or if you think the fee is not reasonable, you can contact the attorney or object to the fee with Social Security.
- If the case requires an appeal beyond the hearing level, and you win your case after a second (or third) hearing. In these cases, Social Security permits an attorney to seek a higher fee based on the idea that your case required more work than a typical matter. Like the situation above, the attorney still must seek approval of the fee from Social Security, and explain what he or she did to warrant the higher fee. Here too you have a say.
- If you hire an attorney to help you with a cessation of benefits, in other words, you were receiving Social Security disability or SSI benefits and the government decided you are no longer disabled. In this case, if you request the government continue paying you while you appeal, there will be no back benefits from which to draw a fee. Some attorneys will request a monthly retainer in these cases equal to 25% of each month’s benefit. Once the case is over, this money, which will be held in the attorney’s trust account, will be used as the basis for a fee petition. If Social Security approves the fee, the attorney may then use that money as the attorney fee. If Social Security approves a lower amount, the attorney will return the balance to you.
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What about costs?
Many Social Security lawyers will either request a costs retainer to handle out-of-pocket costs, or will advance costs as they come up and request you reimburse those costs at the end of the case regardless of whether you win or lose.
Unlike some areas of law where attorneys can earn enormous fees based on large settlements, as we discussed, in most cases, Social Security attorneys are limited to no more than $7,200.00 in fees in any case, and the vast majority of cases, those fees are much lower. Because of this, most attorneys simply can’t afford to take on the costs of developing a case without reimbursement.
If you are concerned about costs, make sure you talk to an attorney about their practices and get it in writing. If at all possible, request a cap on what an attorney will incur in costs without talking to you so you can have some security that you won’t get hit with a large cost bill at the end of your case. Our firm has a clause like this built into every one of our fee agreements that acts as a promise that we will not spend more than a pre-agreed amount on costs unless we get your express approval.