How good are the returns? Clients hit a home run, on occasion, and rarely less than a base hit. Let's just say that if Ross balances his "fund" properly, he claims all of its high-risk suits can go sour and the fund can still produce an overall return of at least 15%.

To understand how this is possible, let's take a closer look at one of Ross' deals. In fact, his latest deal looks something like this: From lowest to highest risk, it starts out with a layer of cases in which attorney's fees are being factored. (Ross compares the process of advancing attorney contingency fees in settled cases with factoring a company's receivables). These have an estimated return of 12%. "A small attorney might be required by the state to work a case involving an indigent," Ross says. "Perhaps it takes two months before the case is settled, and the attorney then has a fee due from the state. But the state takes 30 to 90 days to pay him."

"It's a simple factoring situation. The attorney gets his money from us at a discount of, say, 8% over 60 days. That's a 48% annual rate of return before compounding. On that, our clients get 12% plus 20% of anything over the remainder, so 12% might ultimately be 19%."

The "remainder" is calculated as total earnings from the case less the clients' agreed, base return.

The next layer of the fund includes cases with an expected return of 20% from the financing of attorney or plaintiff expenses, as discussed earlier.

The high-risk layer is much more speculative than the first two layers. It could include major personal injury, wrongful death or patent infringement cases with million-dollar settlements. Ross expects the returns on these cases to be in the 30% range, and as high as 50% to 70% with overages.

Consider the aforementioned bricklayer, for example. If Ross' pool advances him $2,500, it might get back $4,000 or more, depending on the wait. "Instead of getting just $5,000 from the insurance company, he's going to get $25,000 because he held out. Even after paying his attorney's fee, repaying our investment and our return on investment, he's still going to be better off. Deduct from the plaintiff's $25,000 the attorney's fee of $7,500, the $4,000 return to us on our $2,500 investment, and the plaintiff gets $13,500 rather than the $5,000 the insurance company originally offered him," says Ross.

To simplify all of this for his clients, Ross packages these tiered cases into $2.5 million deals broken down into $50,000 units. They're given a five-year life, meaning Ross will reinvest earnings from settled cases in new cases he identifies while the pool's in progress.

For the risk-averse client, Ross has an insured version of his investment pool. "After having participated in our initial partnerships, some people we were working with set up an insurance company to insure [our funding programs], so we were also able to offer insured deals with lower returns. For example, our clients would receive [an average annual return of] 8% on a one-year deal, 10% on a two-year deal, and 20 % over three years. If our principal and return aren't paid back, the insurance company makes up difference," explains Ross.

At the other end of the risk spectrum, Ross will occasionally make litigation funding investments outside of his pooled structure. "Sometimes we have clients who say they don't want to invest in our funds but want to try one or two situations. We might do a well-researched case that's already at the appellate level. Suppose we have a paraplegic who needs to rebuild his house for wheelchair access, and his case has already been settled for, say, $3 million to $6 million. We might invest $100,000 to $300,000 or more. In cases like this, we've averaged returns, net of fees, of about 40%."