Rise in disability claims leads to more business, competition
Monday, February 28, 2011
By Zack Needles, The Legal Intelligencer
Social Security disability attorneys across the state said they're busier than ever as the recession-spurred uptick in layoffs has caused a spike in disability claims.
But while the influx of claims has in many ways been good for business, several lawyers the Intelligencer spoke to said it has also been a cause for concern.
For one, some attorneys said they're worried about the potential fallout that could occur if and when the economy right-sizes. But attorneys in the field say the boom itself has also attracted another problem in the form of unwelcome competition from national companies -- not law firms -- that handle claims with paralegals and other nonlawyers, often from out-of-state, without telling their clients.
Attorneys said the recent uptick in Social Security disability claims, while profitable for them, partially reflects the country's gloomy job market.
According to statistics on the U.S. Social Security Administration's website, the number of Social Security disability applications filed monthly pre-recession -- prior to September 2008 -- rarely reached 200,000, while the number of post-recession applications routinely topped that figure and often approached 300,000 per month.
In fact, according to the SSA's statistics, the number of monthly applications rose above 200,000 only 14 times between January 1985 and September 2008, while the number dipped below 200,000 only five times between September 2008 and January 2011.
The struggling economy has naturally led to more layoffs, and aging workers with health problems who were just managing to get by at their jobs were, unfortunately, often the first to be let go. What this means is that an increasing number of applications are being filed by people who can qualify for Social Security disability benefits, but likely would not have, felt the need to apply for them had it not been for the recession.
N. Leah Fink, a Social Security disability lawyer with Pittsburgh plaintiffs firm Kunkel & Fink, said there were "a lot of walking wounded" in the national labor force who found themselves unemployed after the economy went south.
"I think that a lot of the workers that were laid off or terminated were part of the group of folks that actually could work with some accommodations," she said.
Vincent J. Quatrini Jr., managing partner of the Greensburg-based workers' compensation and disability firm Quatrini Rafferty, offered the hypothetical example of a 50-year-old steel worker who has remained employed despite struggling with diabetes but is suddenly laid off and unable to find work elsewhere.
"Those are the kinds of people that are now applying for Social Security disability who would have still been in the labor market for several years," he said.
Eric A. Shore, managing attorney of Social Security disability firm the Law Offices of Eric A. Shore in Philadelphia, said he's seen a "very significant increase" in business over the past three years but admitted he's worried about what might happen to that work when the job market improves.
"I'm afraid of how the pick up in the economy is going to affect us, that's why we opened a personal injury department," he said.
Mr. Shore said he anticipates hiring will improve over the next year, which could possibly even cost him some of his existing clients. "The lifespan of a Social Security case is two years," he explained. "I may have clients ready for a hearing in two years who call me and say, 'Hey thanks for your help, but I don't need this anymore because I was able to get a job.'"
Not all lawyers shared Mr. Shore's apprehension about the future.
Gregory T. Kunkel, also of Kunkel & Fink, said he's not concerned about a dramatic dropoff in business because the aging baby boomer generation is likely to keep up the flow of applications well into the future.
"We have more and more people in that age group," Mr. Kunkel said. "Regardless of the economy, there will still be a large number of disability applications."
Ms. Fink said a more pressing concern for Social Security disability attorneys is the increased competition they face from national companies that hold themselves out as law firms but routinely send paralegals and other nonlawyers to represent applicants at hearings.
While it's legal for nonlawyers to attend these hearings, Ms. Fink alleged these companies are often less than forthright with clients who believe they're paying for legal representation. Many times, she said, the clients are also unaware that their representative is from out-of-state.
Mr. Quatrini agreed there is a problem with national competitors providing substandard representation to disabled clients. "They get a whole bunch of cases scheduled for one day and they fly in and then fly out of town again," he said. "They haven't met these people, they haven't figured out how they're going to be as witnesses and they haven't prepared them for this emotional day of a hearing."Zack Needles: email@example.com or 215-557-2493. To read more articles like this, visit www.thelegalintelligencer.com.