A limit on the fees attorneys may collect on Social Security cases has remained unchanged for nearly 13 years, leaving some smaller firms and solo practitioners struggling to keep their practices running as inflation and costs of business outpace their earnings.
The stagnating cap has has resulted in a practice area that both fails to attract new talent and drives established practitioners to seek out more profitable types of law, say some Social Security attorneys. Those attorneys say the drain on resources is creating a smaller pool of representation available to vulnerable populations that will ultimately lead to fewer claimants getting the help they need.
In June 2009, the Social Security Administration raised the previous maximum limit for fee agreements under Section 206 of the Social Security Act from $5,300 (adjusted in 2002) to $6,000 in order to “adequately compensate representatives for their services while ensuring that claimants are protected from excessive fees.”
That limit has not been adjusted since. ...
According to National Organization of Social Security Claimants president David Camp, the tax that Social Security imposes for releasing the fee—currently 6.3%—has continued to go up in that time, as have most other business costs.
“Nobody likes to say they want more money,” said Camp, “but at some point, when you’re operating a small business or when you’re a solo attorney with maybe one assistant, it’s very hard to have a payroll … and it’s been brutal, and it’s now been 13 years.” ...
Tim Cuddigan of Omaha-based Cuddigan Law said his firm had to adapt the services it offered about five years ago when it became clear that the cap wasn’t going to change any time soon. Cuddigan Law’s focus on Social Security disability proved unable to generate enough income to support the three-attorney firm, so it supplemented its offerings with a veterans disability practice.
“The rent has gone up, salaries have gone up, insurance has gone up, and the fee cap hasn’t gone up,” said Cuddigan.
“It’s become this low-wage way to practice law, and such an unfortunate overall reduction in the number of people that are willing to do it,” Camp said.
Camp and Cuddigan said they have seen fewer law school graduates looking to enter the field as well as experienced attorneys leaving behind their Social Security practices because of the low pay. They said in some cases small firms and solos have gone out of business. ...
21 comments:
Initial app representation becomes CDR representation. You have a right to it sure but its unavailable and SSA has no legal duty to provide it.
Courts haven't had a problem with CDR rep thus far. You have a right to it but you can't get it because you can't afford it and there's no contingency fee money.
Count me in that camp. Left SS law to go into PI/med mal. The money is, obviously, a world of difference. I still prefer the practice of SS, but it just wasn't paying the bills.
I'd like to know if increases to the original cap of $4000.00 have kept up with inflation.
With the high inflation rate of 2021-22, it seems unreasonable to keep it at $6000.00. Social Security beneficiaries just got a 5.9% increase.
I’m a TE in an FO … I agree we really need to remove the cap altogether And just pay a straight 25%.
We have been adapting to the changing economics of the practice area, including the failure to raise the cap, for several years by closing satellite offices, not replacing staff, reducing office space, etc. and its still not enough. I just need hang on a few more years to get the kids through college and then I am out.
One obvious way around the cap is to just not file a fee agreement. Or at least make it two tier so higher appeal levels will change it from fee agreement to fee petition.
With the cap frozen so long fee petitions are becoming a better alternative each year.
@1:09PM Our experience does not match yours. When we do file fee petitions they are routinely cut by ALJs and appealing them to Regional is practically a waste of time. Add to that the additional delay in the fee petition process coupled with the frequent mistaken release of all retro benefits by the payment center in fee petition cases, and its an unworkable situation to routinely use the fee petition process.
I put this in my appeal to the Ninth Circuit Court of Appeals FDC brief. We will see if the judges will ever worry about this whole nonsense with the SSA.
Raising the fee cap of $6000 would attract more attorneys. It is simple.
1:09 You can of course choose to go that way, but if you do, expect to see fees reduced by ALJs at every turn and incredible delays is seeing the fee petitions acted on at every level.
We still do fee petitions regularly where the claim was appealed and Remanded by either the Appeals Council or Federal Court under the "two tier" agreements and we see what happens with ALJ's reviewing those fee petitions.
I would like to make a couple of points:
1.) Another aspect of the problem is the numerous errors that are being made with Attorney Fees. I make several calls a week to either the Baltimore Call Center or the Regional Payment Center in my area. I feel like I am "begging" to get paid. Recently, I had a case approved at the Application level on December 8, 2021. I called about it at the end of January. The payment center said that the case was at the Field Office. Getting through to the Field Office is difficult. I do have a way to get through and I did. I was connected with the Field Representative dealing with the case. He told me the problem was fixed. This is a small case with the claimant in pay status because of early retirement. She and I have still not been paid.
2.) Attorney Fee Petitions. I handle many appeals to the Federal Courts. I, of course, have a two tiered fee contract and file many Fee Petitions. There are specific guidelines in the Regulations and HALLEX instructing the ALJs as to how to determine Attorney Fees. For the past 10 years I have been arguing with at least one of my local hearing offices regarding the arbitrary and capricious determinations of Attorney Fee Petitions. I found out that there are a few ALJs who honestly believe that they are limited to $6,000 Attorney Fees. Recently, a new hearing office director came into town at one of the hearing offices. He, along with some of my input now requires that a memo be prepared regarding the amount of the Fees. I hope this works. If you have to appeal the amount granted you are limited to one appeal. For years the Regional Chief ALJs office in my area did the same thing the hearing offices were doing, i.e., decide the amount without any rationale. At one point, I was told that the rationale was "work product" and I could not have it.
I believe that my 10 years of complaining is finally paying off. Last year I actually contacted my Congressman for assistance in collecting a large fee from a 10 year case. It took almost a year for an ALJ to make a decision.
Finally, I believe, but I cannot prove it that the ALJs in some offices give the fee petitions to non-attorney clerks. Those clerks have no idea what to look for, they have no idea about practicing law and dealing with difficult or not so difficult clients. Perhaps some of the clerks have an axe to grind and they take it out of the fees. I could tell some ridiculous stories about Attorney Fee Petitions. My point is do not give up.
1. Either tie the cap to COLA or eliminate it and just make it 25% flat.
2. Pay interest from the treasury fund, not from a claimant's past-due benefits, when SSA decides to just not release awarded fees for over a year.
To me, it makes sense for these attorney fees, federal minimum wage, etc., to increase annually based on COLA, just like social security payments are. It seems the most fair to me.
25% flat is a joke. That means my attorney would of gotten like $20,000 instead of $5600 (or so) for my disability case. No thanks. Tie it to COLA.
There should be a minimum and maximum for cases decided at intial/reconsideration/hearing and Federal Court/remands... All shold increase with the Cola. Additionally, SSA should pay the fees beyond one year of benefits. Taking 2, 3, 5 or eveb 6 or more years to get approved on essentially the same case is rediculous...if not inhumane!
...and yet SSA increases the user fee they charge the attorneys/reps every year. If fees are not being increased, then SSA needs to really eliminate the user fee they charge us. Let's be honest, fee payments have been delinquent and often processed incorrectly (especially over the last two years). Many of us are spending hours tracking down fees that were mishandled by SSA, but yet we still have to pay SSA a user fee for poor processing service, which does increase each and every year.
Or, just remove SSA from the equation all together. Charge whatever fee you want and collect it yourself from the claimants. Problem solved.
Or let's do it the way most cases are done, check is made out to claimant and rep. Rep puts it in her escrow account. Rep pays expenses, deducts his fee (agreed to previously in writing) and then cuts a check to the claimant. Easy peasy and it happens every day all over the country.
This is late, but 10:54 am -- the $4000 cap was set in 1990 the year I became an attorney. $4000 in today's dollars is $8,604.38. I would be very happy if the cap was raised to this and then tied to the COLA. I have already cut back on the cases that I am willing to take and rely more on staff to do work that I use to personally do in order to keep on handling SSDI cases. Without a raise in the fee I will be forced to stop handling the claims.
@1:40
While I generally agree, I'm not aware of what protections are in place in dealing with the mentally incapable and given the client pool of disability claimants, that's a concern not seen in most other areas of practice. Maybe invert the fee petition process, providing an avenue for claimants (or their payee) to object to fees subsequent to an award, but the fee is presumptively valid absent a finding to the contrary.
Handling the fees the way personal injury cases and other litigation settlements are handled would be fine. There is little to no need for the agency to try to protect claimants. Most, if not all, state bars aggressively pursue any misconduct allegation regarding the handling of money and the rules require that legal fees be reasonable. So, either the claimant or the agency could file a complaint if an attorney mishandles funds or tries to charge an unreasonable fee. There is no need for the agency to regulate this and the fact that they do has little to do with their concern for claimants. The agency demonstrates on a daily basis that it has little concern for claimants so arguing that they want to regulate fees to protect claimants is laughable. They do it because, like any bureaucracy, they crave power and this gives them additional power.
Plus they loathe lawyers. Inside and out.
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