May 16, 2014

"Cost Per Case"?

     I received an e-mail recently from a company offering a free "analysis" of my firm's "cost per case" during the conference of the National Organization of Social Security Claimants Representatives (NOSSCR) this week.
     The company didn't explain exactly what they meant by "cost per case." I think they were talking about the cost of advertising for cases and screening prospective new clients. The company said that the "industry average" of "cost per case" is $500-$800. They claim to be able to do it for $275-$395 per case.
     I have no idea how they could possibly compute an "industry average" since law firms aren't sharing this sort of information. Indeed, I don't think that law firms are computing this sort of thing nor could they do so on any reliable basis. If a prospective client calls my firm, we ask who referred them, but we can't rely upon their statement of how they got our name. They may say it was a former client and then not be able to give the referrer's name because they are embarrassed to be relying upon a television ad rather than a personal referral. They may say it was a television ad but they may have first heard of my firm from a former client and merely been reminded about my firm by the television ad. Much of the time, a prospective client will have heard of my firm in more than one way. It's the same for other law firms.
     Still, that company's "cost per case" number may not be that far off from what's normal these days. Those not practicing in this field may not understand the heavy expenses associated with representing Social Security claimants.  Despite what you may think if you're not involved in this field, representing Social Security claimants is a low profit margin business. Advertising is just one element of those expenses. Unfortunately, it's one element that we can't skimp on and stay in business.


Anonymous said...

I agree, Charles. Once you start advertising, you can't stop or the potential clients will just call the next lawyer on the commercials proceeding yours. We're caught up in an "arms race" of sorts because several of the big PI firms in our area decided to start dedicating some of their commercials fishing for SSDI cases. However, we do track our "cost per case" with all our advertising mediums. With the amounts of money we're spending, we try to make sure our resources are allocated properly. But it's not a perfect science, as you say. A new client may have spoken to a neighbor, saw our commercial, then sent an e-mail through our website. How is that file labeled?

With the decreased backlog and lower ALJ pay rate, the profit margins have certainly narrowed. While I'm not complaining because I'm still able to make a good living, it's not like we just send in a 1696 form and collect a $6K check, like some people make the practice out to be.

Anonymous said...

no, you have to show up for a 30-minute hearing as well and sometime have to call docs requesting medical evidence.

Anonymous said...

You got it, 11:47. But don't tell anyone else. I don't a rush of people trying to join this gravy train...

Anonymous said...

11:47, a competent attorney also reviews said medical evidence, consults (multiple times) with the client, prepares briefs and memoranda, and handles appeals. Someone sounds like a jaded ODAR employee.

Anonymous said...

I am no longer astounded by the ignorance of the salaried general public (and SSA employees) who have absolutely no concept of the basic costs of running any business (but especially that of law firms). All they see is the gross income that they THINK just flows in automatically. Aside from the costs of maintaining a physical office with rent or mortgage, utilities, furnishings, computer networks, telephone lines, online services and salaries of employees, there are special expenses incurred by reps. By the time they've concluded that they may not recover and return to work, most real people are indigent. We front the purchase of medical records and often advance costs of psychological testing or medical examinations and most often are not reimbursed at the successful end of a case. We have to meet numerous times throughout a 1-3 year period to give emotional support and legal advice to increasingly anxious clients, we and our staff spend hours eliciting useful information from usually relatively uneducated clients to fill out numerous forms. Many of the SSA employees appear to be of the opinion that all reps are like the green associate in a PI firm who is handed a file the afternoon before he/she is to represent the claimant at a hearing. Since I am a sole practitioner, to thoroughly review and take notes on a file that may exceed 1,000 pages usually will take 5-10 hours, then writing a hearing brief (and accurately citing pages of exhibits) will require a minimum of 3-4 hours. Typically, my assistant and I probably expend about 30 hours before we eventually receive a check (if we win the case). I am fortunate--because of the increased denials and wholesale forced amending of onset dates to cut past-due benefits (and fees), some of my colleagues have had to lay off staff.

People who work for a salary usually have no concept of the overhead required to maintain a firm.

Anonymous said...

As a managing partner in my firm, I understand and agree with your points above, 2:55. But 3-4 hrs to write one prehearing memorandum? No offense, but you may need to work smarter, not harder.

Anonymous said...

I have practiced in this field since 1979 and I do not advertise. My "advertising" are the thousands of happy and some not so happy clients. I believe that attorneys are known by what they do and not what they say they will do. In the 1980s and 1990s I almost had a monopoly of the Social Security Disability business in an area of over 1 million population. Then other attorneys started advertising on tv, on city buses, on bus stops, on the internet. I was admitted to the Bar in 1973 before attorneys could advertise. I disagree that Social Security Attorneys "have to advertise." I have a lot of business but not as much as before. On the other hand, as less work came in I cut back expenses. As employees retired or left I did not replace them. At the end of the day I am satisfied that I have done it my way, without advertising. Word of mouth, referrrals from attorneys etc. Most of my competitors are not even members of the local county bar association.

Anonymous said...

Snark and somewhat nasty comments in this thread aside, most ODAR employees really like competent representatives.

But there are a huge number of people being represented by people who walk in having no idea what sort of work their client did, no idea when their last doctor's visit was and what the purpose of that visit was. Reps who won't seek out new records or send the request for those records a few days before the hearing when there is no chance the records will arrive in time.

You can only avoid annoyance so many times when a representative says "Mr. Smith is 51 years old and can only do sedentary work so he meets a listing."

Everyone is happy when a senior attorney requests added records and the attorney provides them and it results in an on-the-record decision. But few are happy when an attorney ignores that request and the case ends up being a quick favorable decision in front of an ALJ months later taking up a slot that could have been used more productively.

There are representatives who submit evidence summaries and briefs and do so in such a way that decision writers learn they can rely on those summaries to be accurate.

Then there are representatives with claimants who all seem to be stricken with depression and neuropathy after their initial application is denied.

Believe me, good reps are well liked.

Anonymous said...


You must be the only rep who doesn't call us and make us request the documents from the medical provider and take our $15 for their records. While there are too many reps calling us and sending their clients to us for things they should be doing themselves, I personally believe it is just fine for you all to rely on our ability to force medical providers to give up their records for $15 under threat of subpoena (an essentially toothless one, but a subpoena nonetheless).