Given the current nature of the Social Security disability industry, some Social Security disability firms that do not have a solid budgeting plan in place are running into cash flow issues. This is due to the fact that average wait times for hearings are on the rise. According to a report released by the Office of the Inspector general, the average time to have a hearing scheduled was 490 days as of April, 2016 vs. 353 days in 2012. However not all of the news is bad, the average attorney fees are on the rise as well. The average attorney fee in 2013 was $2,848.76 as opposed to $3006,67 so far in 2016. (source: https://www.ssa.gov/representation/statistics.htm). Thus, firms that are able to budget properly can actually expect to profit more now than they have in the past.
A few things that should influence your budgeting decisions are when you need to hire additional staff, when you plan to spend money on marketing, and the timeline of other expenses that a Social Security disability firm incurs.
Timeline of Cash Flows
You should create a timeline of when you expect future revenues in order determine when you will have excess cash to either hire more staff or spend more on new marketing avenues. You can do this by evaluating when your cases are expected to pay out.
For cases where the hearing has already been scheduled, you should be able to pinpoint when those cases will pay out (assuming you will win the hearing). For cases where the hearing has yet to be scheduled, you can look at the hearing wait times for the given ODAR and estimate when the hearing will be held.
Hiring Additional Staff
The most common staff members that a Social Security law firm will have to hire are intake staff, paralegals, and attorneys or advocates. From surveying national SSD law firms, we have found that a typical intake staff member can normally resolve about 20 leads per day, or 2-3 leads per hour. A paralegal should be able to handle about 200 cases at any given time. An attorney or advocate should typically go to around 25 hearings per month. You should consider hiring more staff when any of your employees exceed their maximum capacities.
Hopefully, the timing of when you need to hire new staff will coincide with when you have additional cash available. If you find that you are running out of cash but have staff who are exceeding their maximum capacities, then you should consider slowing down the rate at which you are taking new cases.
Whether you are considering running TV ads, starting a PPC campaign, or buying leads from a 3rd party company, it is important to keep in mind that you will not see a return on these campaigns for at least 18 months or so given the current wait time to have a hearing scheduled. Thus, marketing campaigns should be strategically initiated when you have extra cash available to grow your practice. Whether you run a law firm or a tech startup, growth is an important measure of success, but it is also important to keep in mind that growing too fast could make your firm strapped for cash.
We Can Help
At eGenerationMarketing, we produce exclusive Social Security disability leads throughout the country. We don’t have any long-term contracts or minimums, so you can decide to take on leads at the pace that makes sense for your firm. To find out more about our services, give us a call at 617.800.0089.