Contingency Fees: The Common Payment Structure

Most disability lawyers charge a contingency fee, which means they only get paid if you win your case. This arrangement can provide peace of mind, as you don’t have to pay legal fees upfront or out of pocket. Instead, the lawyer’s fee is taken from the backpay benefits you’re awarded once you win your case.

Typically, the fee is 25% of your backpay (the amount of money you are owed for the period between your disability onset and the approval of your claim). However, there are limits to this fee:

• Maximum Fee: The Social Security Administration (SSA) caps the amount a lawyer can charge at $6,000. If your 25% fee exceeds this cap, the SSA will only approve a payment of up to $6,000, no matter how much more the lawyer would otherwise be entitled to.

What is Backpay?

Backpay refers to the benefits that you are owed for the time you were disabled but had not yet been approved for Social Security disability benefits. The amount of backpay you receive depends on how long it took to process your claim, including any waiting time for hearings or appeals.

For example, if you applied for SSDI or SSI and were approved after a year-long waiting period, you would likely receive a year’s worth of benefits as backpay. The lawyer’s fee would be calculated based on 25% of this backpay amount, with a cap at $6,000.

No Fees if You Don’t Win

One of the key advantages of hiring a disability lawyer who works on a contingency basis is that you don’t have to pay anything if your case is denied. In other words, if you don’t win your claim or your appeal, the lawyer doesn’t get paid.

However, it’s important to note that even though your lawyer’s fee is contingent on success, you may still be responsible for paying certain expenses related to your case, regardless of whether you win.

Additional Case-Related Expenses

While the lawyer's fee is typically contingent on your success, there are other expenses related to your case that you may need to pay for. These can include:

• Medical records: Obtaining your medical records and documentation to support your case.
• Consultative examinations (CEs): If the SSA requires an independent medical examination, it may come with additional costs.
• Filing fees: Any costs associated with filing paperwork for your claim or appeals.
• Expert testimony: In some cases, your lawyer may need to hire medical or vocational experts to testify in your case.

These expenses are typically separate from your lawyer’s fee and may be your responsibility, regardless of whether you win or lose your case. Be sure to discuss these potential costs upfront with your lawyer so you have a clear understanding of what you may need to pay for.

What Happens If Your Case Goes to Federal Court?

If your case goes all the way to federal court, the lawyer may charge additional fees, but this is typically addressed as part of the contingency fee structure. If your case goes into federal court after an unfavorable decision at the appeals level, the fee may still be capped at $6,000, but the process can sometimes result in additional expenses for the client. Be sure to clarify with your lawyer whether their fee structure changes if your case advances to federal court.

What to Expect with Your Lawyer’s Fee Agreement

Before hiring a disability lawyer, you should be provided with a clear, written fee agreement that outlines how much the lawyer will charge, what expenses you will be responsible for, and how any fees will be paid if your case is successful.

Make sure you:

• Understand the contingency fee: The percentage charged is typically 25%, but confirm the exact terms.
• Clarify additional costs: Be aware of any out-of-pocket expenses you may be required to pay, such as for medical records, expert testimony, or travel expenses.
• Know when payments are due: Ensure you understand when the lawyer will receive their payment, which typically comes after your benefits are awarded.