Did you know you lawyer can ask for any fee at all in a Social Security disability case? Five thousand. Ten thousand. Fifteen thousand!
I though attorneys were paid a percentage of what I get?
1) Fees as a percentage of back benefits:
Percentage-based contingency fee agreements are the most common way attorneys get paid in Social Security disability cases.
If you win, the attorney gets 25% of your back benefits up to a $6,000 cap (this is an increase from the $5,300 cap in effect before June 2009).
The 25% or $6,000 is a standard fee agreement that Social Security will almost always approve if the case is won and results in back benefits.
However, there is one other way a lawyer can be paid:
2) Fees based on a petition to Social Security:
This is the Wild West of fee agreements.
Your attorney can ask for any amount.
Of course, the lawyer has to itemize his time and make an argument showing why attorney fees above and beyond the 25% or $6,000 are appropriate.
Ans finally, Social Security to approve the requested attorney fee. This doesn’t always happen. Social Security can approve less than the requested fee or refuse to approve any fees at all! That doesn’t happen that often.
In general, Social Security will approve whatever fees it sees fit.
When are fee petitions used?
Typically, fee petitions are required when the attorney works on an overpayment case. There are no back benefits in a Social Security overpayment case. The best outcome for you is if you don’t have to pay anything. 20% of zero won’t keep the lights on at the law office no matter the volume of case your take.
So, the only way an attorney can take an overpayment case is by getting money from you up front, putting it into a trust account until the case is done, then filing a petition for fees. IF Social Security approves the fees, the lawyer can finally transfer the money into the regular account.
Another time fee petitions are used is if you fired your first attorney and hired a second one. If the first attorney has not waived fees, then Social Security has to decide how much to pay each attorney. And the way they do that is… you guessed it, by requesting fee petitions from both attorneys.
And finally, fee petitions are also used if a client disagrees with the attorney fees Social Security has approved. If that happens, the attorney must petition Social Security to have his or her fees approved.
Is there a fourth time fee petitions are used in Social Security cases? Let me know in the comments.