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Sometimes law departments may have to track time to comply with regulatory obligations

If your company operates in a regulated industry and also has unregulated businesses, you may need to track your time so that the allocation of your lawyer’s time is fair to the public. When rate applications go to the regulatory agency, costs of providing the utilities service, for example, are supposed to fairly represent what they are. If lawyers work for unregulated activities but bill that time to the regulated side, that is a problem.

There may be other situations I am not aware of where regulatory requirements dictate some form of time tracking by internal lawyers (See my post of Nov. 22, 2008: internal time tracking with 16 references; and Jan. 5, 2011: internal time tracking with 9 references).