Capital velocity: why settlement speed can outweigh gross verdict size

A contingency firm commits payroll, marketing, and case costs before an uncertain fee is received. That makes time to cash a central operating variable alongside outcome and fee size.

JusticeCFO defines settlement velocity as the elapsed time from a consistent starting event—such as signed intake—to the date the firm can use its fee. The start and end points must stay consistent. Settlement date alone can understate the cycle when approval, liens, or disbursement delay the receipt.

Two matters can produce the same fee and require the same case costs but create different operating value if one returns capital much sooner. Faster recycling may support payroll, new matters, and heavier long-duration cases without adding debt.

Speed should never displace client interests, professional duties, case quality, or sound legal judgment. It is a portfolio-planning input—not a reason to settle a matter prematurely.

Capital Return on Case Costs, or CROCC, is a JusticeCFO management metric. A simple version divides attorney fees earned by attributable case disbursements. If marketing acquisition cost is included, the denominator and allocation method should be stated explicitly so comparisons remain consistent.

A multiple alone can mislead because it ignores how long capital was outstanding and how losses are represented. Review it with median duration, write-offs, loss frequency, concentration, and—where appropriate—an annualized return calculation.

PWPV multiplies potential attorney fees by estimated recovery probabilities. The firm can refine those probabilities by practice area, phase, and its own historical outcomes. Example percentages for intake, discovery, or trial are illustrations only; they are not industry standards.

The forecast should also include resolution timing and remaining costs. A large probability-weighted fee expected far in the future cannot cover next month’s payroll unless the firm has enough cash or usable credit to bridge the gap.

Place projected fee receipts, operating expenses, and case-cost commitments on the same monthly calendar. Then compare projected cash plus policy-permitted credit with the firm’s hard cash floor and forward coverage target.

Run at least a base case and delayed-receipts case. A firm that sees the shortfall early has more choices: revise deployment, arrange capital, change acquisition pacing, or adjust partner distributions while preserving legal and client obligations.