Here are three primary ways an attorney earns a fee in Long Term Disability or ERISA claims:
- On a “Contingency Fee” basis. This means that you do not have to pay any fees up front to retain the attorney, and the attorney only earns a fee with a successful outcome in the case. The attorney is paid a percentage of the recovery, typically between 25% and 40%.
- Other attorneys are paid on an hourly basis for an agreed-upon hourly rate. Such fees are typically paid whether you win or lose the case.
- A few attorneys will accept the entire case for one set “flat fee”.
There are many variations within the three categories above. For example, in category two, the attorney may not ask for anything up front and bill you once a month. Or, the attorney may request a large retainer up-front, and draw down fees from the retainer, and ask that you always have a minimum amount of fees in the retainer.
The best choice for you really depends on the specific needs of your individual claim.
Administrative Appeals and Filing a Lawsuit
The Ortiz Law Firm handles most Long Term Disability and ERISA claims on a contingency fee basis. The “contingency” that must occur is that you must recover benefits in order to have a fee. In other words, you do not have to pay a fee if there is no recovery in your claim. However, Mr. Ortiz does accept some cases on an hourly basis, depending upon the circumstances. Under a Contingency Fee agreement, the fee is calculated as a percentage of the total amount recovered.
At the Ortiz Law Firm, we charge a percentage of your past due benefits and a percentage of your future benefits for 12 months if you are put “on claim” during the internal appeal process (i.e., before going to court). If we must file a lawsuit and your claim is settled in court for a “lump sum”, then we charge a percentage of the total settlement amount.
Negotiating Lump Sum Offers
In Florida, most attorneys charge 40% of all money recovered in a lawsuit. That percentage applies whether the claimant is put on claim (approved for on-going monthly benefits) or is given a “lump sum” settlement with no on-going payments. At the Ortiz Law Firm, if the claim settles for a lump sum then the attorney fee is only 33 1/3% of the lump sum payment.
Negotiating insurance buy-outs or lump sum offers: in some claims, the insurance company will offer claimants a lump sum payment or settlement so that the insurance company does not have to pay monthly benefits. The lump sum offer may be 50%, 60%, 70%, or more of the total value of the claim. The Ortiz Law Firm does assist some claimants in negotiating a lump sum payment. We are different than most firms, however, in that we do not charge a fee on the entire settlement amount. Instead, our fee is applied only to any settlement above and beyond what the insurance company offered you before our involvement. For example, let’s say the insurance company offered $50,000.00 to buy out the policy. You come to us and we negotiate the amount up to $75,000.00. We do not charge a fee on the entire $75,000.00. We would charge a fee on $25,000.00, the difference between the final amount and where you started ($75,000.00 minus $50,000.00).
If you have any questions about the attorney’s fee in these types of disability claims, my best attorney advice is to pick up the phone and ask Mr. Ortiz your questions.
If you would like to see a written copy of our basic fee agreement, contact the experienced legal team at Ortiz Law Firm by completing the form to the right or by calling (888) 321-8131.