Social Security Disability Fee Petitions: Why Having a Previous Lawyer Can Turn Attorney Fees Into a Nightmare

If you have applied for Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI), you have probably heard that disability attorneys generally do not get paid unless the claimant wins.

That is true in many cases—but the way Social Security attorneys actually get paid is more complicated than most people realize.

And when a claimant has had more than one lawyer during the same Social Security disability claim, attorney fees can become surprisingly complicated.

At the Law Offices of Christopher Le, we sometimes take over Social Security disability cases after another attorney or representative has already been involved. One of the first things we have to determine is not only where the disability claim stands, but also:

What happened with the previous representative’s attorney fee?

That seemingly simple question can eventually affect the claimant’s back pay, the new attorney’s fee, and how long everyone has to wait for Social Security to sort everything out.

The Normal Social Security Disability Attorney Fee Process

Most Social Security disability cases are handled under what is called the fee agreement process.

Under the normal fee agreement process, the claimant and attorney sign an agreement providing that, if the claimant wins and receives past-due benefits, the attorney may receive a percentage of those benefits.

For favorable decisions issued on or after November 30, 2024, Social Security’s current fee-agreement limit is generally the lesser of:

• 25% of the claimant’s past-due benefits; or

• $9,200.

(Social Security Administration⁠)

For example, if a claimant receives $40,000 in past-due SSDI benefits, 25% would equal $10,000. Under an approved standard fee agreement subject to the current cap, the attorney fee would generally be limited to $9,200.

Social Security generally withholds money from the claimant’s past-due benefits so that an authorized representative who qualifies for direct payment can be paid directly. (Social Security Administration⁠)

In a straightforward case involving one attorney, the process can be relatively simple.

Things become much more complicated when there was a lawyer before that lawyer.

What Happens When You Had a Previous Social Security Disability Lawyer?

Imagine this situation:

A claimant hires Attorney A when the disability application is originally filed.

The claim is denied.

For whatever reason, the claimant later leaves Attorney A and hires Attorney B.

Attorney B obtains thousands of pages of medical records, prepares the claimant for the hearing, develops the medical evidence, files a pre-hearing brief, appears before the Administrative Law Judge, and ultimately obtains a favorable decision.

The claimant understandably assumes:

“Attorney B won my case, so Social Security will pay Attorney B and send me the rest of my back pay.

Unfortunately, it may not be that simple.

Attorney A may have withdrawn from the case, but withdrawing as the claimant’s representative is not necessarily the same thing as waiving the right to request an attorney fee.

Under Social Security’s rules, when multiple representatives are involved, all representatives who are seeking a fee generally must have signed a single qualifying fee agreement. If a former representative did not sign the applicable agreement and has not waived the right to charge and collect a fee, Social Security may be required to disapprove the fee agreement. (Social Security Administration⁠)

That is where the fee petition process can begin.

What Is a Social Security Disability Fee Petition?

A fee petition is different from the standard contingency fee agreement most disability claimants sign when they hire an attorney.

Under the fee petition process, the attorney asks Social Security to determine what constitutes a reasonable fee for the actual services that attorney provided.

Social Security Form SSA-1560, officially called the Petition for Authorization to Charge and Collect a Fee for Services Before the Social Security Administration, can be used for this purpose. (Social Security Administration⁠)

The attorney generally provides information regarding the services performed and the amount of time spent working on the claim.

Social Security then evaluates the requested fee based on factors that include:

• The type and extent of legal services provided;

• The complexity of the disability case;

• The attorney’s skill and competence;

• The amount of time spent working on the case;

• The results achieved;

• The level of the Social Security administrative process at which the attorney became involved;

• How far the attorney pursued the case; and

• The amount of the fee being requested.

(Social Security Administration⁠)

Unlike the standard fee-agreement process, the fee-petition process does not have the same $9,200 maximum fee cap. SSA determines a reasonable fee based on the work and circumstances of the case. Direct payment from withheld past-due benefits, however, is generally limited to 25% of the past-due benefits. (Social Security Administration⁠)

That distinction is important.

What If Two Different Lawyers Worked on the Case?

This is where the process can become a genuine headache.

When multiple representatives want to charge a fee and the case must proceed through the fee-petition process, each representative generally files a separate fee petition for the services that representative actually performed. (Social Security Administration⁠)

So our hypothetical case could look like this:

Attorney A files a fee petition requesting compensation for:

• Reviewing the initial claim;

• Communicating with the client;

• Obtaining medical records;

• Filing the reconsideration appeal; and

• Other work performed before withdrawing.

  
  

Attorney B separately files a fee petition requesting compensation for:

• Reviewing the prior claim;

• Reviewing thousands of pages of medical evidence;

• Developing updated medical evidence;

• Preparing the claimant for the ALJ hearing;

• Drafting legal arguments;

• Preparing for vocational expert testimony;

• Attending the disability hearing; and

• Performing post-hearing work.

  
  

Social Security then has to evaluate the petitions and determine a reasonable fee.

The attorneys cannot simply decide among themselves what Social Security will authorize. SSA expressly states that an agreement between multiple representatives regarding how they want to divide their fees does not control SSA’s fee authorization under the fee-petition process. (Social Security Administration⁠)

Why Is This Such a Nightmare for Disability Claimants?

The biggest problem from the client’s perspective is usually back pay.

A claimant may have waited two, three, or even four years for Social Security to finally approve disability benefits.

After finally receiving a favorable decision, the claimant understandably wants the back pay immediately.

But Social Security generally withholds a portion of past-due benefits when representative fees may need to be paid. When there are unresolved fee issues involving multiple representatives, determining what happens to those withheld funds can require additional processing. (Social Security Administration⁠)

For the claimant, this can be incredibly frustrating.

You finally won.

You may have spent years without income.

You may have fallen behind on your mortgage, rent, utilities, car payments, credit cards, or medical bills.

Then you discover that there is still another administrative issue that needs to be resolved because an attorney who represented you two years ago may still have a potential fee claim.

That does not necessarily mean anyone did anything wrong.

The former attorney may have legitimately performed valuable legal work and may be entitled to request compensation for it.

The current attorney may also have performed substantial work that ultimately resulted in the favorable decision.

But Social Security still has to follow its rules regarding who may charge a fee and how much each representative may receive.

It Can Be a Nightmare for the Lawyers Too

The fee-petition process is not particularly enjoyable for disability attorneys either.

Under a normal fee agreement, the attorney generally knows the maximum fee that may be authorized if the case is successful.

With a fee petition, the lawyer may have to reconstruct and itemize years of legal work, explain the services performed, document the time spent on the case, submit the petition to the proper Social Security component, and then wait for SSA to determine what fee is reasonable.

The attorney may have successfully represented the claimant through an extremely complicated disability hearing but still cannot simply collect whatever amount was originally stated in the lawyer’s normal fee agreement.

Social Security—not the attorney—makes the fee authorization decision.

Meanwhile, the client may understandably be calling the lawyer asking:

“Where is the rest of my back pay?”

And sometimes the frustrating answer is:

We are waiting for Social Security to finish processing the attorney fee issue.

Can the Former Lawyer Just Waive the Fee?

Sometimes.

A former representative who does not intend to seek compensation can submit a waiver of the right to charge and collect a fee.

This can make an enormous difference.

Under SSA’s current rules, when multiple representatives are involved, a fee agreement can still qualify in certain circumstances if a representative who did not sign the agreement has properly waived the right to charge and collect a fee. For this exception to apply to approval of the fee agreement, SSA generally must receive the waiver before the favorable decision. (Social Security Administration⁠)

But a former attorney is not necessarily required to waive a legitimate fee.

Perhaps that attorney represented the claimant for a year, reviewed hundreds of medical records, filed appeals, communicated with doctors, and performed substantial legal work before the attorney-client relationship ended.

That attorney may understandably want to be paid for those services.

The problem is not necessarily the former lawyer.

The problem is how complicated Social Security’s fee rules become once multiple representatives are involved.

What If the Client Thinks a Fee Petition Is Too High?

The claimant is not powerless in the process.

The claimant receives information concerning the requested fee and may raise objections regarding the fee petition.

After SSA issues an initial fee authorization under the fee-petition process, a claimant or representative generally has 30 days from the date of the initial fee authorization notice to request administrative review. SSA can affirm, increase, or decrease the authorized fee after reviewing the matter. (Social Security Administration⁠)

Social Security’s job is ultimately to determine a reasonable fee based upon the work performed and the applicable regulatory factors—not simply to approve whatever amount an attorney requests.

Changing Social Security Disability Lawyers? Tell Your New Attorney About Every Prior Representative

If you change lawyers during an SSDI or SSI case, make sure your new attorney knows about every person or organization that previously represented you.

That includes representatives from:

• Prior law firms;

• Disability advocacy companies;

• National disability representation companies;

• Non-attorney representatives; and

• Attorneys who may have represented you earlier in the same claim.

  
  

Your new lawyer should know whether the prior representative:

1. Properly withdrew from representation;

2. Remains listed as a representative with Social Security;

3. Signed a previous fee agreement;

4. Waived the right to charge and collect a fee; or

5. Intends to file a fee petition.

   
   

Finding these issues early can sometimes prevent unpleasant surprises after a favorable disability decision.

The Bottom Line

Social Security Disability attorney fees are usually straightforward when one attorney handles a case from beginning to end.

When multiple attorneys have been involved, however, the fee process can become substantially more complicated.

A prior attorney who withdrew from the case may still have the right to request a fee. That can affect whether the current attorney’s fee agreement is approved, whether separate fee petitions must be filed, how Social Security handles the portion of past-due benefits withheld for attorney fees, and how long it takes to completely resolve the financial side of the case.

The frustrating part is that everyone may have done everything correctly.

The claimant may have had a legitimate reason to change lawyers.

The first attorney may have performed legitimate work.

The second attorney may have ultimately won the disability case.

And everyone can still end up tangled in Social Security’s fee-petition process.

That is why representation history matters much more in a Social Security Disability claim than many people realize.

Questions About a Social Security Disability Claim?

The Law Offices of Christopher Le assists individuals with Social Security Disability claims, including SSDI and SSI cases at various stages of the administrative process.

If you have a pending disability claim, have previously been represented by another attorney, or are considering changing representatives, understanding the potential attorney-fee consequences early can help avoid surprises later.

Every Social Security Disability case is different, and attorney-fee issues involving prior representatives can be particularly fact-specific.

This article is provided for general informational purposes only and is not intended to constitute legal advice regarding any particular Social Security Disability claim.