I have no inside information about the impending Binder and Binder bankruptcy but I think I can give the most likely answers to three key questions.
Is Binder and Binder going out of business?
Not now. In Chapter 11 the debtor stays in business and tries to reorganize. Maybe Binder and Binder can reorganize so they can stay in business indefinitely but I would be surprised if they can. My guess is that they stop taking cases and work down the cases they already have. That would take around three years. Their expenses would drop dramatically since they would no longer be paying for advertising and they could start laying off employees but their gross receipts would stay almost the same for a couple of years. They would be making money as they wind down. Maybe they could hope to crank up the ads later if times got better.
Why is Binder and Binder going bankrupt?
In the best of times, representing Social Security claimants is a high overhead, low profit margin business. This is the worst of times to be representing Social Security claimants. There is almost no profit to make. Add in the fact that Binder and Binder owes about $40 million and the question isn't why they're going into bankruptcy but how they've stayed in business so long. This comes as no surprise to me.
Why is it such a tough time to be representing Social Security claimants?
Social Security's Administrative Law Judges are approving a much lower percentage of disability claims than they did a few years ago. Because of inadequate staffing backlogs are climbing rapidly at Social Security. If you think this means that Binder and Binder should be doing better since their fees would be increased by the delay, you'd be naive. The slowdown in getting to the eventual payday completely overwhelms the importance of the somewhat larger paycheck. If the backlog gets two months longer over the course of a year, you lose two months of gross income but your expenses are largely unchanged. A 5% or 10% larger fee isn't nearly enough to make up the difference.