When former professional wrestler Hulk Hogan successfully sued the website Gawker for violating his privacy, Internet billionaire Peter Thiel paid his legal bills. Now Thiel’s foundation is helping Harvard dropout Eva Shang launch Legalist, a company that will provide a similar kind of legal financing to small- and medium-sized businesses involved in litigation, in return for a percentage of the payoff.

Plenty of companies already offer such services — it’s called litigation financing. But Legalist has accumulated a database of 15 million court cases from all over the United States. Shang and her partner Christian Haigh, who is studying for a master’s degree in computer science at Harvard University, use custom-made “big data” algorithms that compare current cases with past ones with similar circumstances. This allows them to estimate how long a court case will probably run and whether the plaintiff will probably obtain a significant settlement or judgment.
“We could get the court and the case number and we would plug it into our algorithm. If it seems like a promising case, then we would fund them,” Shang said. “If we lose the case, we don’t get any money. It’s not really lending because they don’t have to pay it back.”

Litigation financing is already big business.

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