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.
well this explains why they won't update records anymore and ask the judge to do it for them.
ReplyDeletebinder sold a large chunk to hig capital in august 2010. as you reported at the time
ReplyDeletehig capital as a hedge fund receives a lot of funding from a different venture capital group, one headed by mitt romney’s son, tagg. mitt romney in his bain capital used to use bankruptcy filings as a way of cashing out from a business that he wasn’t able to turn around successfully within 3-5 years; this way, bain would profit even if the business had to be shut down.
my private suspicion is that this bankruptcy filing is more to do with hig capital cashing out, than for any other reason. they’re doing things the bain way. hig bought into binder almost 5 years ago so their 3-5 year window is nearly over.
what interests me is that hig made no real efforts to improve binder’s business model in all that time. no standards for intelligent client screening, no careful vetting of cities in which they wanted to open a branch office. i suspect that, somewhere inside hig, this bankruptcy filing was an approved contingency plan as far back as… oh, august 2010.
If you carefully screen your cases and keep your overhead as low as possible, you can make a living in a social security practice. However, it is not the path to fabulous wealth that some on this board believe.
ReplyDeleteI believe that claimants are best represented by local firms, so this good news as far as I am concerned. I hope this will discourage any more "nationwide" firms.
Note too that the article in the NASDAQ aricle, it mentions the crackdown on fraud - and B&B's routinely back-dating documents. I had a case where they had the claimant's doctor send them his blank letterhead, they drafted the supportive letter the the claimant was disabled, faxed it back, and the doctor signed it. They presented the signed letter with the fax artifacts removed - the doctor's office included the unsigned letter with the fax history on it . . .
ReplyDeletePerhaps enough complaints have come in that SSA is thinking of suspending them from representing claimants. Once can only hope!
Although I don't think drafting a letter for the doctor to sign is the best idea, if the doctor signs the letter is he not endorsing the statements in the letter? It certainly reduces the probative value of the letter, but I wouldn't call it fraudulent.
ReplyDeleteI worked for Binder and Binder for 2 years and this is a regular thing. I have never seen back-dating documents, however 'red' stickers for "DO NOT SUBMIT", 'yellow' stickers for "Drug seeking behaviors-Need a Drug and Alcohol Assessment statement," and 'green' stickers for "OKAY to Submit." Also, in terms of the letterhead... they use what's known as a 'clarification letter' that the advocates would type up and have the claimant's provider sign and date to be submitted into the record to SSA. Binder's practices are based solely on banking that the ALJ's make mistakes so they can file a fee petition when the case gets remanded. They don't care at all about having the cases that go to hearings win those hearings the first time. Those cases are horribly developed and sometimes aren't touched for months at a time until 30 days prior to a hearing being scheduled.
ReplyDeleteYou can quote me on that.
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. Las Vegas bankruptcy lawyers
ReplyDeleteBinder and Binder stopped returning my calls in January 2015. When I called to let them know I am receiving chemotherapy, unprofessional clerks would direct my calls to voice mail. I called back three times and begged them not to send my call to someone's voice mailbox. Finally they said my caseworker was on vacation for a week. Previously I have called and I can hear people joking around. I realized something was going on and did an internet search to find out about the Chapter 11. This was the first week of January. It's Feb 2, and I've heard nothing from them. I made a huge error selecting them.
ReplyDeleteI would encourage you to keep calling and ask for your caseworker specifically. Your case could be a possible 'dire needs' case.
ReplyDelete