Nov 7, 2013

There Goes The Old Profit Margin

     John Uptain, an Alabama non-attorney who wants to represent Social Security disability claimants, is offering his services for 20% of the claimants past due benefits instead of the usual 25%. Uptain had previously worked for Social Security for 25 years. He attributes his ability to offer reduced fees to low overhead and not having to pay off student loans.
     Over the years I have often talked with Social Security employees who had serious misconceptions about the realities of representing Social Security disability claimants, particularly about the expenses involved in obtaining clients. You can operate out of your house with zero overhead expenses but you're still not going to make any money until you get a client. You don't get many Social Security disability clients just by networking. Anything beyond networking is expensive. People like discounts but they also wonder if you're for real if you're offering a cut rate price and you're operating out of your home. Shade tree mechanics work cheap but would you trust your car to one you didn't know?


Anonymous said...

Yes, the profit margin has completely evaporated.


Anonymous said...

Well, you just gave him free ad space!

Anonymous said...

Most reps working out of their homes can get by on one claimant a month.. Figure $36,000.00 a year? And if he has his Federal retirement to boost his income. He's got it made.. He might actually have time to meet his claimant's and know what is in the file.. hmmmmm, just a thought..

Anonymous said...

Maybe after 25 years with SSA he realizes how little work actually is required of representatives and the number of representatives who rarely rise above the low expectations. Maybe he realizes that the maximum fee far exceeds the reasonable value of the services rendered when viewed in terms of reasonable hourly rate and hours worked.

Maybe he believes that the disabled should be able to keep a little more of their money.

Anonymous said...

I'm an attorney and I have no problem with this. There is no reason why attorneys and non-attorney reps should not compete on price. I remember reading a case where Justice Scalia called the Social Security fee agreement an "adhesion contract".

However, I do agree with CTH that people at SSA underestimate the overhead involved in a traditional social security practice. Additionally, at least in our area, the average fees are smaller because the backlog has been significantly reduced. Finally, local practitioners have to compete with large national firms.

To sum up, a social security practice is not the great bonanza that is discussed in the comments on this forum.

On final postscript, I see nothing wrong with lowering overhead by working at home. After all, ODAR employees work at home. There is nothing wrong with "flexi-place" for reps. Other than meeting claimants and attending hearings, there is nothing about a Social Security practice that requires an office.

Anonymous said...

4:18PM - You get the level headed, well thought out award for the month. Justin