How to measure contract turnaround time

Ask a legal ops lead how long contract review takes and the answer comes back in days. Very little of that time is somebody reading the contract.

That is not a knock on anyone. The days are what sales and procurement feel, and the file spends the bulk of them sitting somewhere untouched. You can get at that number this week without a timestamping project.

Count the pile instead of timing the file

Finding out how long contracts wait on you takes two numbers you already have.

Count how many requests are open in your queue right now. Count how many you closed last week. Divide the first by the second.

Say 140 requests are open and you close 35 in a week. Contracts are spending about four weeks with you on average, whatever any single review feels like from the inside.

That arithmetic is Little's Law, and it is one of the more useful things to borrow from operations research. The chapter John Little wrote with Stephen Graves runs it on an email inbox: 50 messages arrive a day, 150 sit unanswered, so a message waits about three days for a reply. Nobody had to time a single email to get there.

Two conditions before you trust the result. The pile should be about the same size when you start counting and when you stop, and files have to eventually leave. If your backlog grew all quarter, the number is flattering you. Count open requests once a week for a month and use the average.

Split the clock into segments you control

Four weeks of waiting is not one thing. It is a file sitting in intake before anyone opens it, then sitting again while you wait on an answer from the requester, then sitting while the counterparty's lawyer gets to it.

Report those separately. Request received to first response out is yours. Everything after your comments go back is mostly theirs. Publish one blended number and you will spend the quarterly review explaining counterparty delay to people who cannot do anything about it.

Then track one more thing: the count of open files nobody has opened yet. That is the segment where no work has started and the clock is running anyway.

Cut the pile before you ask for a reviewer

The same equation tells you what actually moves the wait. It falls when the pile shrinks or when weekly closes go up.

Headcount raises closes, slowly, and you probably cannot get it this year. The pile is the lever you have this month. Sorting inbound files by the decision each one needs can get the short ones out the same day and stop them aging behind a 90 page master agreement.

Watch for one thing while you are in there. Files that never leave still count in the pile and quietly drag the average up. Go look at the requests that have been open since spring. Some of those deals died and nobody closed the ticket.

Take the untouched segment out of the clock

Nobody wants to open Monday's queue and find forty files that have been sitting since Thursday with nothing done to them. That segment exists because the first mechanical read has to wait for a person with a free hour. Finding the clauses your playbook covers, pulling the numbers out of them, noticing which covered terms are missing: none of that needs judgment, and all of it needs somebody to sit down.

Running a first pass on every file as it lands will not make the calls for you, and you should not want it to. What it changes is when a file first gets touched. The reviewer opens something that already has the covered terms pulled and the gaps flagged, so a file stops collecting dead days before anyone has looked at it.

Report it in a form somebody can act on

The ACC's legal operations maturity model puts "focus on operational improvement, reducing cycle times and disputes" at the advanced end of contract management, sitting right beside spending review effort only on the highest risk and highest complexity contracts. Those two belong together. You cannot put your effort where it matters until you can see where the time goes.

So publish three numbers a month: open requests, weekly closes, and the average wait those two imply. Add the count of files nobody has opened yet. Hold off on the dashboard project until those four numbers have been on a page for a quarter and somebody has argued with them.

goHeather is free to try if you want to see what an automated first pass does to the untouched part of your queue.

This is legal information, not legal advice; consult a lawyer for legal advice.