Jan 9, 2017

Attorney User Fee Remains At 6.3% -- How About Liens Instead?

     The fee paid by attorneys and others who receive direct payment of fees for representing Social Security claimants will remain at 6.3% of the fee in 2017 subject to a $91 cap per case. Social Security says this is their actual costs. Those of us who represent Social Security claimants feel this is absurd, that the agency's true costs are vastly less, and that the fee is nothing more than a thinly disguised tax.
     By the way, whenever I post about fees, I get the response that "real attorneys" collect their fees directly from their clients. That's bunk. There are three basic ways that attorneys collect fees. One is to collect the entire fee up front. A second is to bill clients on a pay as you go basis. This works only when you're representing corporations or wealthy individuals. If the client stops paying, the attorney withdraws from the case. Neither requiring payment up front or on a pay as you go basis is practical in Social Security cases because the claimants are usually too poor. The third way is contingent fees. The attorney takes a portion of the settlement or award if the client ultimately receives one. In such cases, the attorney has a lien on the settlement or award. The client cannot avoid paying up. However, the Social Security Act prohibits most liens on benefits. Those who would want to repeal attorney fee withholding without allowing an attorney a lien on back benefits aren't trying to make attorneys collect their fees like "real attorneys." Those "real attorneys" who represent claimants on a contingent fee basis have a lien giving them an assurance of receiving a fee. If you want to repeal withholding but give me the same lien as "real attorneys" have when they represent clients on a contingent fee basis, I'm with you. How about it? Also, by the way, I'm not aware of any other situation where attorneys have to pay a fee for their lien on a settlement or award.


Anonymous said...

Well said. As an experienced attorney with over a decade of experience, I agree with this post completely.

Anonymous said...

How do you reconcile your view that attorneys should get liens on Social Security awards with your view that SSA and student lenders shouldn't be allowed to recover debts from such awards?

Anonymous said...

Those familiar with Article 9 of the UCC involving secured transactions know that comparing student loan debt to an attorney lien (for compensation for the actual work performed) is comparing apples to oranges.

Quite frankly, even the fact that the overall back benefits are reduced prior to attorney fees being deducted is wrongful. I know of no other area of law where a third party can obtain the benefit of receiving value prior to an attorney being compensated out of the same pool of money when the attorney's work was what created the money out of which the other entities are to be reimbursed. There is a general principle that one should be compensated reasonably for their work and effort. You can't create situations where an entity can sit back and do nothing and expect to reap the benefits of someone elses work before that person is compensated.. it is untenable.

Furthermore, I think most of the attorneys and representatives who practice Social Security Disability correctly and who put in the time and work are woefully under compensated for the amount of effort, expertise and resources they expend.

I do feel that Disability Attorney's are good at pursuing cases on behalf of others who are often underserved but do a horrible job advocating for themselves. (Maybe it is just the altruistic mindset of many of the types of attorney's this practice area attracts) Most of us put our trust in both our elected officials and the leadership of the major trade organizations to make sure they advocate appropriately on our behalf as a whole. I have been extremely disapointed with both of these groups.

In the last year, I reached out to NADR and NOSCCR in response to their requests for volunteers to assist with various committees including committees involving lobbying. Neither of these committees ever followed up with me. I feel as though the leadership within these organizations have become cliquish and they themselves individually are satisifed with the status quo, even at the expense of those who practice in this area as a whole.

I recognize that these are tough times to be advocating for the interests of the disabled but I have not seen much effect advocating for our profession come out of these organizations in quite a long time.

I am curious to see how others feel about this?

Anonymous said...

Sorry, just stopped laughing after thinking of a bunch of SSA reps trying to brush off what they forgot about quantum meruit liens. Them sitting there trying to figure out a reasonable fee amount knowing that just counting hours and doing a fee petition isn't going to cut it.

Lets face it, if we go on factors like the difficulty of the litigation.....well, I will just listen to my inner Pooh and not say anything at all.

Anonymous said...

Considering federal government salary and benefits, which seem to be much higher than the private sector, I'm not sure $91 is an unreasonable estimate of the cost.

Anonymous said...

It's all fun and games until they are picking your pocket. Then it's an outrage. Don't feel too bad, reps, the SSA employees mocking you will likely be the ones feeling the pain when the republicans get done slashing the SSA administrative budget.

Anonymous said...


The secured versus unsecured distinction means less when student loan debt is virtually unextinguishable, unlike credit card or medical debt. The loan is "secured" by extraordinary legal protections, which is why they're so readily available to risky borrowers. Of course, disability advocates would prefer to disregard those protections, because they don't directly affect their own bottom lines. Making desperate and destitute claimants pay 25% of their entitlements to reps whose contributions are often questionable = Good. Making those same people honor their other debts = Shameless.

As for this: "I know of no other area of law where a third party can obtain the benefit of receiving value prior to an attorney being compensated out of the same pool of money when the attorney's work was what created the money out of which the other entities are to be reimbursed."

You also know of no other area of law where you don't actually need to be a lawyer to obtain similar results, and where your opponent has a legal obligation to hold your hand throughout the case. Seriously, where else can you sue your opponent for failing to develop YOUR case for you after you lose?

Anonymous said...

"where else can you sue your opponent for failing to develop YOUR case for you after you lose?" - While sometimes that's the reps fault for not developing some obvious key element of the case, quite often it is the ALJs fault in not disclosing what particular issue he/she needed more information on before issuing a decision. Due to the complexity of the rules and size of most records, in any given case there are many potential issues and reps cannot read minds. The notice of issues given in the hearing notices are a joke - boilerplate that does not focus on any particular issue. They are often issued before an ALJ even looks at the claim file. There is no discovery against SSA in a non-adversarial process. For example, reps cannot make a Judge say that there is some particular note buried in a huge medical record that he/she feels needs more explanation before he can give a particular doctor's opinion substantial weight. If the ALJ does not mention that before issuing an unfavorable decision, and then uses that as a basis for the decision? Claimant is effectively given no notice of the issue prior to the closing of the record and decision. And yes, the ALJ failed to properly develop the record if he/she did not mention the issue, give the rep opportunity to develop it, or do so themselves.

Anonymous said...

Putting some thought would make things easier. I wonder if actual adversarial hearings would be better. Not the current adversarial nature of the ALJs, but having a government rep who isn't the ALJ in the hearing. At least then we could hear the ridiculous reasons raised on the record so they could be addressed before the denial. It's painful to get a denial that states the claimant showed no objective proof of IBS.

"I'd like to exhibit some pictures."
"Of what counsel?"
"Objective proof of IBS. I have 47 pictures. Oh, and one video of the claimant waddling to the restroom."
"Why is the claimant waddling counsel?"
"Look at picture 12, that's all you need to know."
"Counsel, I'd like some hard evidence of this alleged IBS issue."
"I am sorry there is no hard evidence for you, but I'm sure the oozing piles of soft evidence will be convincing."

Tim said...

10:04 AM If pictures are not sufficient, give me 4-5 days to provide you with fresh samples!!!

I had a doctor tell me I had no "real" proof of my pain for arthritis and fibromyalgia. I asked about the epilepsy I used to have, and he said, "Well, you had EEGS that showed it..." I said, not until I was 21! The Cat scans and EEGS I had before that showed nothing unusual. THAT, however, didn't keep the state of Indiana from denying me a driver's license!

Anonymous said...

For workers' compensation claims and awards, the State can sometimes take taxes out from the award and fee -but that is different in nature since it is a tax.

The ideal situation, and less expensive administratively, is to do like workers' compensation carriers do. Pay the warrant to the attorney (not non-attorneys), let the attorney square away the fee and expenses and cut a check for the balance to the claimant. Of course, this requires congressional action to amend sec 207 of the Act.