Have your client sign a contract for attorney representation. We recommend using the two-tiered fee agreement provided below.
Two-Tiered Fee Agreement
The fee agreement process works well for the typical case in which a favorable decision is issued by SSA at or below the ALJ hearing level. In protracted cases, cases with perhaps more than one ALJ denial decision and multiple appeals, cases that take years to resolve, a $5,300 fee, when you finally get it, is probably inadequate. In such cases, you may find yourself wishing you had used the fee petition process. For this reason we recommend using a two-tiered fee agreement that combines use of the two fee approval systems into one contract. With this fee agreement, most cases will be processed under the fee agreement process. But in a protracted case, you can request a full 25% fee by filing a fee petition.
A sample two-tiered fee agreement follows at §178.3.1. This fee agreement meets the requirements of the “fee agreement process” (because it calls for a fee of 25 percent of past-due benefits or $5,300, whichever is less) if the favorable decision is issued at any level of administrative review through the first ALJ decision after the date of the contract—the first tier. If the first tier is applicable, the decision maker must approve the fee agreement. If the second tier is applicable, that is, if a favorable decision is issued later, the fee is 25 percent of past-due benefits. When the second tier applies, because the fee agreement process is no longer available, a decision maker must disapprove the fee agreement. A fee petition must be submitted to obtain approval of a fee. See §§700 and 703.
Be sure to explain that expense reimbursement is not part of the fee and that SSA will not pay expenses directly to the attorney. The client must pay these expenses directly to you whether the case is won or lost.
Administrative Representation Only
Note that this contract applies only to representation before the Social Security Administration, which is governed by 42 U.S.C. § 406(a). If your client loses before SSA and you decide to take the case to federal court, a new contract governed by 42 U.S.C. § 406(b), which includes language for how to treat attorney fees awarded under the Equal Access to Justice Act, will have to be negotiated. Using two contracts, one for representation before SSA and one for federal court representation, has the advantage of allowing use of a much simpler contract for the usual case that will never go to federal court rather than trying to incorporate all features into one contract. A two-contract approach avoids the implication that you will certainly take the case to federal court if your client loses; and it gives you the opportunity to have your client come to your office at the time the case is taken to federal court to negotiate payment of expenses, or even negotiate a new contract for administrative representation that will be applicable if the federal court remands the case. See §758, for a sample federal court contract.
Scope of Representation Clause
Because some disability claimants more or less assume that because you have agreed to represent them in their social security disability or SSI claims, you will be representing them in all cases having to do with their disabilities, e.g., Medicaid appeals, long-term disability claims, mortgage or auto disability insurance claims, COBRA issues, worker’s compensation claims, etc. The contract includes a scope of representation clause designed to avoid such misunderstanding.
§178.3.1 Form: Two-Tiered Fee Agreement
Two-tiered Fee Agreement — Social Security Disability/SSI
ATTORNEY FEES: I employ [name of firm] to represent me before the Social Security Administration (SSA) in my disability case. If I win at any administrative level through the first administrative law judge (ALJ) decision after the date of this agreement, I agree that the attorney fee will be the lesser of twenty-five percent (25%) of all past-due benefits awarded to my family and me, or the dollar amount established pursuant to 42 U.S.C. § 406(a)(2)(A), which is currently $5,300, but may be increased from time to time by the Commissioner of Social Security. I understand that my attorney has the right to seek administrative review to increase the amount of the fee set under the preceding sentence of this agreement; but if that happens, my attorney will not ask for a fee of more than 25% of total back benefits awarded in my case. If the first ALJ decision after the date of this agreement is a denial and my attorney agrees to appeal and I win my case later, the fee will be twenty-five percent (25%) of all back benefits awarded in my case. If I receive both social security disability and SSI benefits, I understand that my total fee will not be more than 25% of all past-due benefits, or no more than the limit set by 42 U.S.C. § 406(a)(2)(A), if the limit applies. I understand that if I do not win benefits, then the attorneys get no fee.
SCOPE OF REPRESENTATION: I have employed my attorneys to represent me in my Social Security disability and/or SSI claim. I understand that my attorneys do not represent me in any other public or private claim related to my disability, or with any other government agency or any insurance company unless separate arrangements, including a separate contract, have been made for representation on any other claim.
PAYMENT OF ATTORNEY FEES: I understand that SSA will hold out 25% of past-due benefits and pay my attorneys for their work on my case unless my attorneys waive withholding and direct payment. If the attorneys waive withholding and direct payment or if SSA fails to withhold attorney fees, I will pay my attorneys promptly from the back benefits I receive.
I WILL PAY EXPENSES: In addition to fees, I agree to pay my attorneys for reasonable expenses that they pay in my case. These may include medical records and reports, photocopying, travel expenses, transcript preparation, and the like. I will get a bill for expenses that shows how and when my attorneys spent the money. In a case in which I get benefits, I agree to pay my attorneys back for these expenses as soon as I get a check for back benefits. I agree to pay expenses whether we win or lose.
I HAVE NOT BEEN PROMISED THAT I WILL WIN: My attorneys promised that they will do their best to help me. They did not promise me that I will win.
I accept and approve this agreement:
Name (printed or typed):
Social Security Number
Thomas E. Bush has devoted his practice to social security disability issues since 1977. He was elected to NOSSCR’s Board of Directors in 1988, and was President of NOSSCR for the 1997-98 term. He is the author of Social Security Disability Practice.