Social Security attorneys work “on contingency,” which means that they only collect a fee if they win your disability claim. Whether you are applying for SSDI (Social Security disability) or SSI (Supplemental Security Income), a lawyer will work on your case without making you pay until the end of the case. Even if your case goes on for years, an attorney will not get paid until it is over (and won).
To get their fees paid, Social Security lawyers enter into written fee agreements with their clients and submit those fee agreements to Social Security for approval. If Social Security approves the fee agreement, it will pay your attorney for you directly out of your backpay. The attorney and the client can agree on any fee, as long as it does not exceed $6,000 or 25% of your backpay, whichever is less. That limit on fees is a part of Social Security law, and no attorney can charge more than that.
What Should Be in a Fee Agreement?
To be able to collect a fee, an attorney must submit a written fee agreement to Social Security before Social Security issues a favorable decision on the claim. Most lawyers will submit the fee agreement when they take your case.
Social Security has suggestions for the language in the fee agreements, but there are really only two main requirements. First, the amount of the fee cannot be more than the maximum that Social Security allows: the lesser of 25% of backpay or $6,000. For example, if your backpay award is $20,000, your attorney can collect $5,000 (25% of $20,000). Second, the agreement must be signed by the Social Security claimant and the attorney. If the claimant is a child, a parent should sign for the child. If the claimant is an adult with a guardian, the guardian should sign.
Who Pays for Legal Costs?
There are two kinds of expenses in a case: the amount the lawyer charges for her time and the expenses she pays for while working on your case. While lawyers in Social Security cases cannot charge upfront fees for their time, they are allowed to charge a reasonable upfront fee to cover expected expenses in a case.
In a typical Social Security case, an attorney will pay copying fees and postage to get records to help prove that a claimant is disabled. Those records might be located at hospitals, doctors’ offices, schools, or mental health facilities, among other places. Some facilities may give the lawyer your records for free, but most places charge a fee to copy your file, sometimes as much as 25 cents a page. Usually, copying and mailing costs in a case are not more than $100 - $200.
Some attorneys will ask you to pay a small amount in advance to cover the costs associated with your case. If the costs are paid in advance, then the attorney must hold your money in a special account called a “trust account.” The lawyer will tell you when she withdraws money from the account and will return any money left over at the end of the case.
Most Social Security disability attorneys will not ask you to pay costs in advance. Instead, they will ask you to reimburse them for their costs at the end of the case. Whether an attorney wants you to pay costs will be included in your written fee agreement. If you have questions about your fee agreement, you should talk to your lawyer.