Law Firms: How to Handle COVID-19 Trends in Social Security Disability

How has COVID-19 changed SSDI applications and awards? Has the government drive to help the economy via stimulus checks and increased unemployment benefits dampened disability applications?

This post will dive into those numbers—and what they mean for your law firm.

But first, let’s add some context for Social Security Disability law firms seeking to grow their caseloads. If you read Firmidable’s blog post on how to measure the success of your law firm’s marketing campaigns, you know that evaluating law firm marketing depends on a large number of factors.

• How many leads did your legal marketing firm generate?
• How many new case files did you open?
• What percentage of those can be directly attributed to your law firm advertising?
• What effect did the law firm marketing have on other sources of new cases?
• How many cases did you reject and why?
• How many opportunities did you miss due to gaps in your intake process, or lack of a process?

One other important legal marketing factor we did not discuss, though, is the market environment.

So for disability law firms, let’s look now at what COVID-19 has done to Social Security Disability Insurance claims overall.

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Why Law Firms Should Be Aware of the Market Environment When Analyzing Legal Marketing Strategies

Overall market conditions should help shape any legal marketer’s expectations and timeline for gaining new clients and cases.

For market environment, we can typically focus on two aspects:

1. How competitive is your legal market?
2. How much “need” is there for your legal services?

It is important for legal marketing agencies, as well as law firms, to keep up with the market trends of the practice areas you pursue, whether that is personal injury, workers’ compensation, Social Security Disability, or something else.

Ultimately, if market demand is up, you want your marketing results to be up more than your competition; if it is down, your goal is to be down less than your competition. In both cases, you are gaining market share, even if the latter doesn’t feel as exciting.

With that understood, let’s dive into how market changes related to the COVID-19 pandemic apply to Social Security Disability law firms.

SSA Disability Applications Have Steadily Declined Since January 2019

Using the Social Security Administration’s data1 on applications and awards since 2019, particularly throughout the pandemic, we can see that SSA applications have, on average, steadily declined each quarter.

Overall, SSA applications have declined by a rolling average of -16%. This trend is obviously important for disability law firms.

Your Disability Law Firm Intakes Can Decrease with Market Need, While Your Market Share Increases

If your intakes have decreased only -10% over a period of time where the need for your services (i.e. applications) is down -16%, you are actually beating the market and have likely increased your market share by up to +6% against the competition.

If your intakes have been steady or up over this period of time, that’s great news. You are likely dominating your market.

This is also why the best law firm marketing agencies will preach that you should “buy the dip.”

That phrase comes from a stock market strategy that suggests, rather than be a passive buy-and-hold investor, you should do your best to invest more into the market when it is sliding downward. Sure, the market is headed down but you understand that it will again, someday, head back up. By buying when prices dip, your investment goes further, and you receive more stock shares for your money. This sets the stage for your reward when the market ultimately rebounds.

Similarly, in law firm advertising, don’t let your foot off the pedal simply because the need in the legal market has decreased. That is short-term thinking. Your competitors have likely already helped you, out of their own fear, by pulling back, creating the opportunity for you to more efficiently surge forward. The most successful law firms use this long-term thinking to grow.

Disability attorneys around the country say they feel applications have been down since COVID-19 due to short-term relief (stimulus packages and boosted unemployment benefits) and pandemic complications to applying for benefits. Here is what a couple of Firmidable’s law firm clients had to say:

“Not only are the stimulus payments depressing applications, but the closed offices are also a factor. Many people can’t navigate an online application and don’t reach out to an attorney to do it for them. (Our law firm’s television commercials notwithstanding!) This is especially true for SSI applications, which can’t be completed online.”

“Local SSA offices remain closed, and I suspect this also contributes to lower applications overall.”

The data appear to back this up.

Zeroing in on COVID: What Happened to Applications for SSA Disability Benefits once the Pandemic Started

SSA disability applications are down -12.8% since COVID-19 started. This is comparing the average monthly number of applications in the five quarters prior to the breakout of COVID-19 (mid-March 2020) to the four quarters since.

The least affected quarter year-over-year was Q4 (-8%), which makes sense because the holidays typically decrease the number of disability applications in any year.

The most affected quarters were Q1 2021 (-15%) and Q2 2020 (-15.1%). This is also logical since Q2 2020 was the immediate aftermath of the initial COVID-19 outbreak in the U.S., and Q1 2021 saw more stimulus providing people short-term financial relief.

The impact of COVID-19 on law firms doesn’t stop at the applications, though.

Awards of Disability Benefits Are Down Even More Drastically Than Applications

According to published data, SSD awards were down -22.2% in Q1 2021 year-over-year while applications were only down about -15%.

The award rate in Q1 2021 is 35.1% compared to 38.3% in the prior year. Many disability lawyers attribute this to the closing of the SSA offices and a pandemic-wrought decrease in efficiencies to process applications. This is what one attorney said:

This sentiment is shared by others in the industry. Here is what Nancy Altman, president of Social Security Works, had to say in The New York Times article Social Security Is Rethinking How It Runs Customer Service After Covid:

But the Outlook Is Optimistic for Disability Law Firms That Stayed the Course. Why?

Despite all the trends presented above, many disability law firms are optimistic about the future.

This especially true for those that have continued their marketing throughout the pandemic. Potential claimants will likely start looking for long-term relief as stimulus and enhanced unemployment expire. As restrictions continue to be lessened, disability applicants will also have the resources to navigate the system.

“Once the offices reopen, we expect a surge in applications. There is congressional pressure already to reopen SS offices. Coupled with the end of the stimulus payments, we expect 2021 Q4 to see a large increase in apps for us and the country.”

Applications in Q1 2021 picked up +1.7% over Q4. The modest increase is good to see but expected over Q4. More impressive is the explosion in applications that occurred in April.

There were 170,141 applications for disability benefits in April. This is by far the highest number in the past six months and is on par with 2019 averages. We hope this is a sign of normalcy as we continue monitoring the numbers in the months ahead.

One factor to watch: In many states, unemployment benefits are only available to people actively seeking—and capable of—work. So some administrative law judges are questioning potential fraud when a claimant tries to jump directly from unemployment to disability benefits.

Continue Increasing Your Law Firm’s Market Share

Too often law firms make decisions out of fear because evaluating return on investment isn’t always easy, especially when it requires a leap of faith about the future.

In contrast, it is easy to pocket cash flow when you’re unsure of what the future holds.

As a legal marketing agency, we anticipate our law firm clients’ competition will, more times than not, follow this fear-based formula.

Firmidable’s most successful law firms became market leaders not when times were good. Many became known as the top disability attorneys in their geographic markets because of their actions during the uncertain times.

In uncertain times, they didn’t lose sight of the potential long-term gains from buying the dip. Meanwhile, their competitors got too conservative.

The best law firms are built from confidence in the face of uncertainty. Most people just don’t notice it until the good times are back.

If you’d like a review of your law firm’s marketing strategies and tactics, we’re just a phone or Zoom call away.

Talk to article author Alex Ludwig at Firmidable today.

Firmidable has been a national expert in legal marketing for 30 years. It brings law firms customized, data-driven marketing strategies and services, including online and traditional media for a wide range of legal practices. From Maine to Hawaii, it has transformed the lives of attorneys—and their clients.

1 “Applications for disability benefits and number awarded” reported by the Social Security Administration through April 2021: https://www.ssa.gov/oact/STATS/dib-g1.html