Capital velocity is how quickly capital committed to a position returns to the investor and can be redeployed. In legal assets it is set by the duration of matters and the time to cash, and it determines how many times capital can work over a period.
Two portfolios with the same multiple can compound very differently if one resolves faster. Shorter average duration means more turns of capital over a decade, and the arithmetic is steep: a modest improvement in average duration changes the number of turns noticeably.
The measurement has to be honest about friction. Redeployment is never instant and pipelines are finite, so any compounded figure is an upper bound on a real effect, not a projection.
Capital velocity is not a promise that duration can be shortened. It states what a month is worth where a month can be found.
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