The main issue of concern seemed to be about powerful individuals -- with individual agendas -- being able to wield heavy influence in other parties' legal processes. Being secret about it is not illegal, just made the issue more uncomfortable:

https://www.nytimes.com/2016/05/26/business/dealbook/peter-t...

> Roy D. Simon, a professor emeritus of legal ethics at Hofstra University School of Law, suggested that the practice has helped “level the playing field” by providing resources for people to mount cases against big institutions that would be impossible otherwise.

http://fortune.com/2016/05/25/thiel-gawker/

> Perhaps, this could be solved by disclosure: Isn’t it in everyone’s interest to know when people like Thiel are behind a lawsuit? As it turns out, no one has to say a thing. According to Burford Capital, a litigation company whose clients include banks and hedge funds, the law is “perfectly clear … there is no obligation to disclose litigation financing arrangements.”

FWIW, I checked up on the latest news regarding Thiel vs. Gawker. They are currently in bankruptcy proceedings. In June, the court agreed to let Gawker subpoena Thiel and do discovery on Thiel's relationship with Hogan's lawyer:

http://archive.is/HXvDm

> Judge Stuart Bernstein of the U.S. Bankruptcy Court in Manhattan ruled Tuesday that Gawker has established cause for examining Mr. Thiel’s relationship with the lawyer, Charles Harder. Gawker seeks evidence, if any exists, that Mr. Thiel conspired with Mr. Harder to destroy the media company, which could be used to build a lawsuit against the billionaire venture capitalist.

IANAL, and I haven't read anything that has explained the best-case scenario for Gawker, in terms of what evidence it would have to find, and what actions it could take. But apparently there was some merit to Gawker's claim that Thiel's role was problematic.

A Buzzfeed reporter who is covering the case tweeted that Thiel potentially could be damaged by this Stanford Politics story: https://twitter.com/RMac18/status/935214376155365378

One of the supposedly problematic passages from the Stanford Politics article:

> On Oct. 28, 2015, several months before Thiel was revealed to be the funder of a lawsuit that bankrupted renegade media company Gawker, which had covered his political activities negatively and outed him as gay in 2007, the Stanford grad (BA ’89, JD ’92) giddily told several Stanford undergraduates in a private meeting at his San Francisco home about his imminent destruction of what he called a “universally reviled organization.” Four undergrads present at the meeting confirmed the story, a seemingly out-of-character — however vague — disclosure from the quite private Thiel. But why would he divulge such a thing to a small group of students? And why was he meeting with them in the first place?

Assuming that the SP's reporting on this is accurate, Thiel seems to have been way too overconfident in his private meetups with Stanford students. Again, this may end up being nothing in terms of Gawker's last-ditch legal fight, but for Thiel to gloat to students about his secret legal actions seems really dumb and careless. Hopefully (for his sake), he didn't say much more than that to Stanford students about the Gawker case.