What Is a Contingency Fee?

A contingency fee means that you don’t have to pay the attorney upfront or out of pocket. Instead, the attorney’s fee is contingent upon winning your case. Here’s how it works:

• The attorney will receive a percentage of your backpay (the benefits you are owed for the months you’ve been waiting for approval).
• No win, no fee: If you do not win your Social Security Disability case, you don’t owe the attorney any fees.

The contingency fee structure is designed to make it easier for individuals with financial difficulties due to their disability to hire legal representation.

How Are Contingency Fees Calculated?

The Social Security Administration (SSA) regulates the amount attorneys can charge in Social Security Disability cases. In most cases:

• The maximum allowable fee is 25% of your backpay or $7,500, whichever is less.
• For example, if your backpay is $30,000, the attorney's fee would be $7,500 (25% of your backpay). If your backpay is $50,000, the attorney’s fee would be $7,500, as it is capped.
• The fee is deducted directly from your backpay by the SSA once your claim is approved. This means you don’t need to worry about paying the attorney’s fee out of pocket.

How Does a Contingency Fee Benefit You?

A contingency fee arrangement has several benefits, especially for individuals who may not have the financial resources to pay a lawyer upfront. Here’s how it can benefit you:

• No upfront costs: You don’t need to worry about paying expensive attorney fees out of pocket, making legal representation accessible even if you’re struggling financially.
• Incentivized success: Since the attorney only gets paid if you win, they are motivated to do everything in their power to win your case and get you the benefits you deserve.
• Peace of mind: Knowing that you don’t have to worry about legal fees while pursuing your benefits can give you peace of mind during a stressful process.

What Happens If You Lose the Case?

One of the most important aspects of a contingency fee is that you only pay the attorney if you win your case. If your Social Security Disability claim is denied and you do not receive benefits, you do not owe the attorney any fees for their services. However:

• Other costs may be involved in the case, such as fees for obtaining medical records or expert opinions. These expenses are typically not covered by the contingency fee and may be billed separately.
• If your case is denied and you decide to appeal, the attorney can still represent you on a contingency basis, and you will not owe them unless you win.

Are There Any Limits to the Contingency Fee?

The SSA has clear rules regarding attorney fees in Social Security Disability cases:

• Maximum fee: As mentioned earlier, the maximum fee is generally 25% of your backpay, or $7,500, whichever is less.
• Attorney fees approval: Before receiving any payment, the Social Security Administration must approve the fee. The SSA reviews and ensures that the fee is within the legal limits.

This ensures that attorneys are compensated fairly, but also that clients are not overcharged for their services.