As a Social Security disability attorney or advocate, your main priority is to help your clients win the benefits that they deserve. However, the bottom line is that your Social Security disability practice is a business and the key to being successful is to efficiently manage your cash flow. You must ensure that you have a steady stream of income coming in, but this can be especially tricky since it can take months or even years to see a return on disability cases. Therefore, it is important to know exactly how much money you could expect to receive at each level of the application process so that you can manage your business accordingly.

Here is a hypothetical breakdown of how much revenue you should expect after filing the initial SSD application for 100 claimants, and when you’ll receive payments (it is unlikely that you would file all of these claims at the exact same time, but we will imagine that this is the case for simplicity’s sake). All calculations are made based on the SSA’s data for average approval rates and wait times:

1. Initial Application

About 3.6 months after filing the initial application for your 100 claimants, 35% will be approved, so your firm will not receive any back pay. It is likely that you will earn a few thousand dollars from retroactive benefits from the claimants who are approved at the initial stage, but the real revenue will come from the 65% of the claimants that are denied here. It's vitally important to your practice to sign clients at the initial stage because A), the claim will likely be denied, and B), most claimants find an attorney before a denial, so your candidate pool will be significantly smaller if you ignore initial claims.

2. Request for Reconsideration

65 of your clients would then file for reconsideration. About 4 months after filing, an average of 9% of these claims will be approved. Since the average monthly Social Security disability benefit awarded from January 2016 through June 2017 was $1,279.15, we can estimate that the back pay paid to these claimants would be about $3,325.79. This would take into consideration the total amount of time since the initial application was filed. Your firm would collect 25% of this back pay, or $831.45, in fees. This would total $4,988.69 for the 6 claimants approved at this stage.

3. Hearing Before ALJ

You will see the most money coming in for claims won at the hearing level. Since only 6 of your clients will be approved at the reconsideration level, you would then request a hearing before an Administrative Law Judge for the remaining 59. On average, the hearing will be held about 19 months from the date the hearing was requested. An average of 55.38% of applicants are approved at this stage, which is about 33 of your remaining 59 claimants.

According to the SSA, total amount of time elapsed from initially filing to scheduling a hearing is 26.6 months, or a little over 2 years. This means that most approved claimants would be eligible for 21.6 months of back pay, or $27,629,64. For the majority of claimants who take their case to court, your firm would be awarded the maximum fee of $6,000. This would give you a total of $198,000 in fees earned at the hearing level. Combined with the $4,988.69 from those claimants approved for reconsideration, over the course of about 2 years, you would earn a total of $202,988.69 from signing 100 claimants who are filing initial applications.

Keep Your Pipeline Full

They key to running a successful Social Security disability practice is to understand the entire approval process and manage your cash flow accordingly. It is important to have a steady stream of new SSD clients coming in so that you always have claimants at each level of the process, therefore giving you a constant flow of revenue from cases won. If you are interested in increasing your caseload and ensuring that you have a constant stream of new clients in your pipeline, give us a call today at 617.800.0089 to discuss our Social Security disability case leads.

Data from:

https://www.ssa.gov/appeals/DataSets/01_NetStat_Report.html

https://www.ssa.gov/policy/docs/statcomps/di_asr/2015/sect04.html

https://www.ssa.gov/cgi-bin/awards.cgi