You may wonder, “How does the attorney get paid in these ERISA disability cases?” Now think about this – So you’ve got a person who is not able to work because of a physical or mental disability and they’re not bringing in any income, but they’ve got this long-term disability insurance policy that promises to pay 60% of their salary. How do they get that money?
First, what I see as an attorney
Well, a lot of times, what I see is when people do these appeals on their own, they get denied, and then by the time you get the Federal District Court, there’s not enough information in the administrative record to support the claim. So the claim dies and goes nowhere. So this person is essentially just left with Social Security Disability, which requires being out of work for about a year before you can even get it, or doctors to say that you’re lifetime-disabled because of a recognized disabling condition that they have a list of in Social Security Disability.
If you have Social Security Disability, you might get $1,100, $1,200, $1,500 a month to pay for that. But if you’ve got a long-term disability policy and you are a higher earner, let’s say you make $4,500 a month, then you should be getting about $3,000 a month in long-term disability benefits from your insurance company, and that’s a big difference. $3,000 a month versus $1,500 a month makes a big difference in the life of ordinary people.
How an attorney gets paid in such cases
So how does the attorney get paid in that case? So if you think about it, you don’t have any money to go out there paying an attorney for every hour that he or she spends in your case. So what the attorneys does, in my experience, in a risk of long-term disability benefit cases, is they charge a contingency fee. So if we get you a lump sum back-pay settlement, then we’ll just use a good number that’s easy to divide by three, because the contingency fee is one third.
For example, If I get you $9,000 in back-pay, my fee is $3,000. But if you’re getting paid $3,000 a month, then my fee is $1,000 every single month while you were on claim, because without the work that we did to get you on claim, then you wouldn’t have that $3,000 a month. So it’s really a difference of get $2,000 a month or get $0 a month if you don’t do everything the right way to appeal your long-term disability claim.
Now, I can say that because I’m confident in the processes and systems that we have implemented in appealing these long-term disability clients, we’ve seen great success in following the same process every single time. Just because the medical condition is different, or the treating doctors are different, every single time we appeal a long-term disability claim, we follow the same exact process, and that process has been successful in a vast majority of our cases.
Hiring an attorney for a disability case is highly valuable. I do not think that my clients who are disabled could have put together an appeal package of the same quality and quantity that I do for my clients. Hecause of this I can 100% endorse hiring an attorney to represent you in your administrative appeal process and in the Federal District Court process, if you get that far in your long-term disability claim.
So the attorney gets paid a contingency fee, which is usually one third of whatever back-pay benefits and any ongoing benefits that are recovered as a result of the efforts of the attorney. Plus, there are usually some costs, and it’s always important to distinguish between a fee and a cost. They are two different things.
So a cost may be, I have to go pay a doctor for a medical narrative, and that might cost me $500, or it might cost me $1,000. But if we don’t get that medical narrative, then you will not win your case. It’s money well spent, but that cost is not taken out of the fee. That cost is taken out on top of the fee, because the attorney may advance that cost for you, but the attorney has to get paid back that cost in the future when the case resolves or when money comes in.
When you may owe money to an attorney
If your attorney loses, then you won’t owe a fee at all, because if it’s a contingency fee, that means the lawyer is taking 100% of the risk of losing at the end of the day. So if you lose the case, the lawyer took that risk and did a ton of work for absolutely $0.
Now, depending on the attorney, you may owe your costs back. If the attorney spends $1,500 on your case and you still lose, you need to look at your retainer agreement to make sure that you understand what it says. If the retainer agreement says that you have to pay that cost back, then you have to pay that cost back, win or lose. So it’s important to understand and distinguish between a fee and a cost.
I hope this video has been helpful. If you have questions, give me a comment in the comment section below, or send me an email. I’d love to talk to you.