While we're talking subprime lending, here is an article from American Lawyer about plaintiff's attorneys who finance contingent fee cases by literally financing them.  Specifically, attorneys are project financing cases with loans that are nonrecourse to the attorney, just as project financing to an SPE is nonrecourse to the parent companies.  If the case is a winner, then the lender takes its money back with a return or may even just take a percentage of the attorney's fee.  If the case is a loser, then the attorney and the lender part ways.  Firms catering to this specific market have sprung up and offer loans at double-digit rates, somewhere between the cost of loans and the cost of venture capital.  Some of the firms profiled are run by attorneys, who evaluate each case or portfolio of cases much as an underwriter of risk would.  Some funds are financed by hedge funds.  (We could all become plaintiff's lawyers just by being investors!)

Established plaintiffs firms have the liquidity to subsidize cases with long time horizons (and their appeals), but other firms cannot, often financing cases out of their own pockets.  In some litigation, part of a defense tactic may be to drag out litigation until the plaintiff's attorney is out of money.  These firms may fulfill a valid purpose.  The creditor seems to share the risk of loss with the attorney, so the attorney won't be forced to declare bankruptcy or go out of business should the case tank.  (Remember Jan Schlichtmann in A Civil Action?)  I know, I know, I am a big skeptic of subprime lending, but this kind of project financing seems to make a lot of sense to me. 

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