Duration Distribution

A duration distribution replaces the single expected-date estimate that legal-asset finance has traditionally relied on with a band and a stated confidence, built from matters that actually reached resolution rather than from an analyst's intuition about typical case length. The distribution's shape matters as much as its center: a right-skewed shape, common in this asset class, means the median duration sits meaningfully below the mean, because a minority of matters take multiples of the typical time to resolve and pull the mean upward without moving the bulk of the population. Reporting the median alone understates a portfolio's true expected holding period, because it discards exactly the tail that drives the difference between an acceptable outcome and an actual capital loss. A duration distribution is not fixed at underwriting; it updates as a matter's procedural posture changes, a judge assignment, a motion ruling, a shift in a counterparty's litigation conduct, each of which shifts the distribution before the matter resolves. Pricing duration off a distribution rather than a point estimate is what allows a capital allocator to reason about the width and tail of a position's holding period, not only its expected value, and it is the discipline that separates duration risk from the outcome-probability risk it is frequently, and incorrectly, bundled together with in conventional underwriting practice.