Here is what is happening today: Social Security is denying more and more cases. Since a Social Security disability lawyer only get paid if the case is won, the increasing denial rate is making lawyers look to other areas to pay the rent and keep the lights on.
Any time you want to kill something, make sure no one can make any money doing it.
The happened previously with VA benefits. Fees for representatives used to limited by a Civil Way era law. Talk about having no Cost of Living Adjustment! The upshot was, finding a lawyer to help with a VA matter was rarer than hen’s teeth.
Competing with the Mega-Store whales
In the Social Security arena, you may have noticed a LOT more advertising for MASSIVE national companies trying to “HELP YOU WITH YOUR SOCIAL SECURITY CASE.”
Hold on! You just said SSA is denying more case and lawyers are either cutting back their disability practices or dropping them altogether? Now you are saying national companies are expanding their Social Security practices?
Yup. The market is changing. The local solo attorneys and smaller (2 to 5 attorney firms) are getting pushed out of disability claims by the increasing percentage of denials. After all, you only get paid if you win, and despite everything you do (regular meetings with your client, detailed reviews of the file, actually preparing for the hearing), you still get denied. Well, it doesn’t take long to realize there has been a sea change in the how the country feels about paying disability benefits and you are just beating your head against a wall.
So, why are new companies coming in?
The legal landscape is changing. There is a gradual movement to allow private equity (investment) in law firms and a loosening of non-lawyers practicing law. In Social Security in particular, non-lawyer representatives have been around for several years. Some are good. Some are very good. And just like lawyers, some are very bad. But, that is not the point. In general, non-attorney representatives are cheaper than lawyers.
Well, not cheaper to you, the legal consumer. You are still being charged the standard 25% up to $6,000 fee. However, non-attorney representatives are cheaper to the companies that hire them. So they are a lower cost, which means more profit. Note: this last part is guesswork on my part. But, I figure if you are going to bargain anyone down on price, it is much more likely to be a non-lawyer, than someone who has six-figures of law school debt and was born with the ***-hole gene besides.
But you just said non-attorney representative can be good. So, what’s the problem that they are cheaper to their employers?
It’s the business model focused on keeping costs down plus the equity investments putting the pressure on producing profits. Even if you have someone who can do good work, are they allowed to?
The business of business is to push work the lowest paid employee possible:
- You don’t have a senior lawyer do what a junior lawyer can do.
- You don’t have a junior lawyer do what a paralegal can do.
- You don’t have a paralegal do what a secretary can do.
- And if you being paid a percentage (instead of hourly), you don’t have ANYONE do ANYTHING if you can help it.
Now, most lawyers are terrible business people. Just awful! They do what they do for a cause. They believe they are doing good. They will talk to people on the phone. And not bill them. Yes, they get well paid compared to many folks. But, it is peanuts compared to lawyers who treat their law firm as a business.
So, how do you make the most money from Social Security disability cases (where you only get paid if you win) and you are running a practice as a business? DO AS LITTLE AS POSSIBLE BETWEEN THE TIME THE CLIENT SIGNS ON AND WHEN THE HEARING IS SCHEDULED.
Do I know this for a fact. Nope. It is just opinion and conjecture based on the status of cases I have seen transferred to me from other offices. So, it is just what I think happens.
I view these national companies like whales. And you know what whales eat? Plankton! How can an animal as big as a whale get by just by eating tiny microscopic animals? By eating a MASSIVE amount of them.
Even with Social Security approving fewer cases, every little case has the potential earning value of $6,000 in legal fees (plus expenses). Many won’t earn anything. A few will earn a few thousand dollars. And a smaller few will earn the brass ring of $6,000. The more cases you have, and the less you spend on each one, hey look, you got a business model: suck ’em up, ignore them, win some, PROFIT!
Here’s the question: do these whales respect the plankton and give it the attention it deserves. Do they remember that each case is a person, and often a family, that is not only dealing with the pain and difficulties of a disability, but also the financial hardship of waiting on Social Security for two years or longer? Do they do all those things the crappy business-people lawyers do because they believe in doing good. Or, do they give it as much consideration as a whale to an individual plankton?
Next time: I’ll tell you just how these companies are keeping costs down while keeping Social Security disability cases profitable. You won’t like it.