If you are terminated by client (or we withdraw from case) after working on a claim covered by a valid fee agreement - Client either gets VSO, pro bono attorney, or reps themselves after that terminations and wins. Congratulations, you now receive only 50% of the 20%, and the client now gets the other 50% by default.

Here’s a clear, practical summary of the VA’s Final Rule published October 25, 2024 (RIN 2900–AR93)—effective April 1, 2025—titled “Fee Reasonableness Reviews; Effect of Loss of Accreditation on Direct Payment.” It fundamentally reshapes how the VA allocates and reviews attorney fees in multi-representative cases.

⚖️ Overview

The rule amends 38 C.F.R. § 14.636, changing how the VA allocates, splits, and reviews attorney and agent fees when multiple representatives are involved or when accreditation status changes.

The intent is to reduce delays in attorney fee payments by introducing default allocation rules—which, in effect, allow VA to automatically split fees in certain circumstances unless a party objects within 60 days.

🧭 Top 5 Takeaways for Practicing Attorneys

1. VA Now Has Authority to “Default Split” Fees in Multi-Rep Cases

• VA will issue a “fee allocation notice” after awarding past-due benefits.
• If more than one attorney or agent has a valid direct-pay fee agreement, VA will apply a default rule:
  • (i) If there’s a continuous representative (still on the case when benefits are awarded), that representative receives the entire fee.
  • (ii) If all representatives have been discharged, the VA will split the fee equally among the discharged representatives and the claimant.
• These are default allocations, not final determinations—any party can contest them by requesting OGC review within 60 days.

📌 Impact: The VA can now lawfully split attorney fees with a claimant under certain circumstances. This codifies what many practitioners have seen VA doing informally since 2023, but it is now expressly permitted by regulation.

2. Attorneys Must Act Within 60 Days to Challenge a Fee Split

• If you disagree with a fee allocation, you must request OGC review within 60 days of the notice.
• Failure to act means the default split becomes final, and VA can release the funds accordingly.
• The rule explicitly states that no further notice will be provided before release if no review request is received.

📌 Impact: Silence equals consent. You must monitor fee allocation notices closely and file challenges promptly.