When it comes to legal spats, companies often loathe having to spend millions of dollars on legal fees while waiting months for a case to drag through courts. But to Wall Street, lengthy litigation is a growing investment opportunity.

Once considered taboo in the legal profession, the practice of litigation finance is enticing more corporate lawyers to become investors, bankrolling lawsuits in exchange for a piece of the potential winnings.

Two litigation investment firms run by former lawyers, BlackRobe Capital and Fulbrook Management, both started last year. In January, the litigation finance team at Credit Suisse left the bank to form Parabellum Capital, after a former colleague's move to start a similar firm, Bentham Capital, a few months earlier.

They are lured by the possibility of double-digit payoffs. The nearly three-year-old Burford Capital, the largest player in the industry, is set to make $32 million on nine cases that were resolved last year, a return of 91 percent, according to the firm.

"Increasingly, companies involved in business disputes are beginning to look to financing as a prudent way to manage the costs of those disputes," said Jonathan T. Molot, Burford's chief investment officer and a Georgetown law professor. "This is very much like a venture capital or private equity process, with the subject matter being different."

The growing industry faces criticism. The United States Chamber of Commerce, for example, has said that these investment firms, bent on making a profit, can inappropriately influence cases.

But the practice is increasingly gaining backing from some of the country's top law firms, which had previously viewed the business with caution. Partners at Simpson Thacher & Bartlett, Latham & Watkins, Fulbright & Jaworski and Patton Boggs have all fought cases backed by litigation finance firms.

"We have been deluged with investment opportunities from my former colleagues," said John P. Coffey, a co-founder of BlackRobe and previously a partner at Bernstein Litowitz, where he pursued shareholder lawsuits against companies like WorldCom. "The typical call is from a top-25 law firm."

David Fuller's view Call me old fashioned but does litigation finance sound to you like the latest example of Wall Street losing its moral compass? I do not doubt that it is lucrative but as this practice grows, can it do anything other than increase litigation to the detriment of corporations in which we invest?

Capitalism is the most successful economic policy ever invented. By incentivising billions of people across the globe it has lifted far more people out of poverty than any other system. Capitalism has also created the seedbed for most of mankind's remarkable inventions.

Inevitably, capitalism also contains the flaws of its creators. To the extent that litigation finance is "very much like a venture capital or private equity process", as stated above, it more closely resembles the destructive leveraged buyout aspect of that industry, rather than the laudable providing of seed capital for fledging firms.

I respectfully suggest that the US does not need litigation finance. Instead, it needs tort reform.