§;Flat fees – WellPoint has several different types of flat fee arrangements with firms that handle litigation matters for
the company. These arrangements include a fixed fee for handling certain types of litigation from beginning to end
(e.g. ERISA benefit disputes); a monthly, capped rate on a particular lawsuit; or a monthly retainer for a set period of
time, under which the firm will accept any lawsuit filed in a certain geography during the period.
§;Fixed fees with success bonuses – With some litigation matters, WellPoint has reached agreements with its firms to
cap the fees for the case, but added certain success bonuses, such as a premium for a successful motion for summary
judgment, defeating a class certification motion, etc.
§;Contingency fees – At times, WellPoint has litigation matters involving the recovery of amounts owed to the company.
In many of those cases, firms have agreed to accept the matter on a contingency fee basis.
OTHER VALUE PRACTICES IMPLEMENTED BY THE LAW DEPARTMENT
§;Contract Attorneys for Ediscovery – WellPoint often uses contract attorneys for ediscovery purposes, which allows
the company us to conduct ediscovery in a more efficient manner.
§;eCounsel Matter Management Contract Renewal – The matter management system has provided enhanced abilities
to monitor and control outside counsel expense through tracking and reporting; allows for a deep analysis of
trends by matter type and geographical areas, costs and other factors. In addition, the matter management platform
allows our in-house legal teams to better collaborate with outside counsel and to share key information and receive
information and status updates to ensure that our strategies are in alignment.
§;Legal RFP for litigation and non-litigation panel firms – Working with the WellPoint Procurement Department, the
legal department has developed a list of “preferred panel of law firms” for all legal services. Through a rigorous RFP
process, WellPoint was able to reduce the number of law firms regularly used from 300 to 46 resulting in significant
§;Live Auction/Competitive Bidding Process for vendors – The live auction process allows vendors who are bidding on
WellPoint business to view how they rank against competitors during the bidding process.
§;Supplier Diversity – increase and monitor – WellPoint recognizes the importance of diversity. We are committed
to being a valuable member of the communities in which we live and operate. Diversity in our supplier base is an
important part of that commitment. WellPoint monitors and selects vendors whose talents and experience reflects the
company’s diverse customer base.
International Law Firms – WellPoint uses a local law firm for our China joint venture business.
ESTIMATED COST SAVINGS
WellPoint has realized savings of 10-20 percent from implementing various value practices. In addition, contingency fees protect
the company from costs if the legal challenge is unsuccessful. If the company recovers, it benefits significantly but likely pays
more than the straight litigation cost. This can be a useful approach to consider when significant amounts are at issue, but
probability of success is low.
MOST VALUABLE PRACTICES; PROVIDED GREATEST RESULTS
§;Fixed Fee Arrangements
§;Legal RFP Process