Some thoughts on starting a Social Security practice

I’ve been fielding some questions on Reddit lately about starting an SSDI practice, and I’ve been asked to share the content.  Unfortunately I can’t copy-paste without doxxing my main Reddit handle, so I’ll have to start from scratch here.  I now present my super abridged guide on how to get into Social Security advocacy, assuming that you are already a licensed attorney in solo practice.

How much can I make on SSDI cases?

SSDI claims are on a contingency fee basis, similar to personal injury, but frankly not nearly as lucrative.  The fees are set by law at 25% of the retroactive award, with a cap of $6000 that applies to claims won at or before the initial hearing.  The government handles withholding the fee from your client’s award, so you don’t have to worry about collections, but the government charges a service charge ($93 if you get the fee cap) for the service and there’s no way around the charge.

How many cases can I expect to win?

This is a really tough question.  Right now the “grant rate” nationwide is only about 45% according to disabilityjudges.com, a site that aggregates freely available data the SSA publishes.  But your mileage will vary based on what hearing offices and judges you appear in front of, as well as of course the quality and nature of your clients’ cases.  I am not aware of any analysis that has been done breaking down grant rates by case type or condition, nor do I think the data for such an analysis is available at all.  Generally, you are more likely to win with claimants over age 50 than with younger claimants; you are more likely to win with a physical impairment than a mental impairment; and you are probably more likely to win an SSD claim than an SSI claim.  If you are screening your clients for the merits of their cases, then your win rate will go up, but keep in mind that turning clients away has some downsides to it.  On the other hand there are some major downsides to not screening, such as wasting time and money on cases you won’t get paid for.

Over the years my personal win rate has been as high as over 90% and as low as under 50% in any given year.  Grant rates have come down substantially nationally in the eight years I’ve been doing it, though, and those high numbers were with firms that strictly screened cases for merit.  The 50% figure comes from a firm that wasn’t allowing me to screen cases at all.  If I counted cases I withdrew from against my win rate, it would dip below 50% in probably several years, but I haven’t run the numbers that way.  My win rate is down since going solo as I haven’t had the luxury of saying no to potential clients; I won’t have that until I have enough work to keep me busy full-time.  At the starting stage, you have to accept that a solid percentage of your clients are going to come in with bad cases, and you’re probably going to have to take the clients you get.  A total novice might have to expect as low as 25% to win.  I plan my financial forecasts and marketing strategy around a conservative 1/3 win rate, which I arrive at by including withdrawals and rejected cases in the overall number.

Sometimes it’s worth taking the tough cases just to roll the dice, but when you do you should be realistic in setting expectations with the client.  I’ve won more than a few cases that I thought were hopeless.  I recently won a case in which the rare “felony onset” rule was in play, and got to pocket half of a $5700 fee as a result.  My gut instinct had been to withdraw, but I stuck with it just for customer service.  Turned out to be the right move.

How do I get cases?

There are a lot of ways to get cases, but I’ve found partnering with other law firms to be the most efficient way to start a practice from scratch.  I do this in a few different ways.  When I first went solo, I was making most of my money doing “per diem” type appearances for large national firms that just needed coverage in my area.  It can be tough to find those gigs, and at first the pay’s not that great, but when I first started I made enough to basically pay my bills that way.  Eventually I connected with a firm that offered a very reasonable fee share – a 50-50 fee split, and they provide a lot of staff assistance as well as marketing and the expenses for obtaining records.  Those gigs are hard to find, but a great way to bootstrap a solo practice until you can get referrals at a more favorable rate.  I created a similar arrangement with a local personal injury firm; they’re covering 100% of marketing and contributing staff time and development expenses, and we split the fee 50-50.  In theory I could have negotiated a better arrangement, but with the way SSA pays out fees the 50-50 split actually simplifies my accounting quite a bit, and there’s some value in that too.

I also picked up a bunch of cases from a local SSDI attorney who folded her practice to take a government job.  Buying or inheriting a client book is always a great way for new solos to get a jump start, but there isn’t an easy way to find those deals.  Mine was the result of years of networking and a good bit of dumb luck.

What expenses do I need to worry about?

The main expense in SSDI is paying for medical records.  If you happen to live in New York, great news, you don’t have to pay fees for the records themselves.  I use a record retrieval service to gather my records, though, and they cost me $20 per record request, which can add up to a few hundred per case.  Before I was paying this expense myself I was pretty willy-nilly in requesting records (at a firm); now I am more strategic in where I invest my development dollars.

Other than that, it’s just basic office overhead.  Personally I run a mostly paperless office.  I pay about $10 monthly for an efax service.  I rent an office for under $500 a month, but for my first two years I worked out of a home office without major issues; I just did a lot of housecalls to meet with clients.  Travel expenses can add up if you’re taking cases out of town.  I spend some money on software that helps me work more efficiently, such as Acrobat Pro which saves me a lot of time reviewing files.  You need a computer, but you don’t necessarily need to indulge in a MacBook Pro like I did.  A scanner is definitely essential, but you can do what I did and find a busted old multifunction machine to inherit from an established attorney who upgraded, or do what I did before that and just rely on a cheap consumer multifunction.  You don’t need a dedicated phone line; you’ve already got a cell phone and besides you should always be available to field calls from potential clients.  Oh, and you need a printer, but see above.  Everything else is a luxury.

What kind of staff do I need?

None.  I don’t have a single full-time employee and I handle about a dozen cases a month, which should be a solid six-figure revenue stream by the time my fee backlog gets caught up.  I pay contractors for various things that I don’t want to do myself, though; as mentioned above, I pay a retrieval service for records, and I’m currently employing an experienced paralegal as a contractor to prepare briefs for me.  These are luxuries, though; I pay people to do work I don’t want to do myself, but I don’t really need to.

How much will I make?

Ahh, the killer question.  That’s a really, really tough question, because there are so many variables.  Theoretically it’s just how many cases you can handle per year, times your win rate, times your average fee, minus your referral costs, minus your overhead, minus any staff expenses, minus any medical or expert fees you pay out.  That’s an awful lot of variables.  My first two years I barely broke $30k; my third year I made $45k; and I’m really hesitant to make predictions for year four but I’m confident that I’ll finally break six figures this year.

How long will it take to get paid?

It takes forever to get paid on these cases.  First off, most of your clients will come to you early in the process and you’ll be waiting upwards of two years to even get to a hearing, unless you find a source of already scheduled cases.  Once you get to the hearing, you might be waiting up to six months for a decision.  Most will come in a month or two; some will come in a week or two; some will drag out.  Once you get the decision, you could get paid a week later, it could be another six months, once in a while it’ll be over a year until you see a check.  Don’t expect to get paid a dime within six months of retaining your first client in the best case scenario.  For some clients, you’ll be waiting two or three years between retaining the client and getting paid.  I’m waiting on decisions right now from some clients I retained in 2015, and I’ve got some from that year who don’t even have hearings scheduled yet.

That’s about all I’m going to say for this initial broad overview.  Read my other posts here and on jamesratchford.com for more information on the nuts and bolts of how Social Security Disability advocacy works; what you need to prove and how to go about it efficiently.  If you have questions, I am available by email at jamesratchfordlaw@gmail.com and by phone.  I also offer a paid consulting service to help you set up your practice and to train attorneys in the basics of SSD advocacy, including the option to observe hearings.  Finally, I have a document library available which I have shared with a few attorneys and firms to help get a practice up and running and to establish a competitive advantage.

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