I oppose tracking time in legal departments at the level of detail found in law firms (See my post of Nov. 22, 2008: internal time tracking.).
Even more I question the value of charging clients for the hours worked by inside-counsel (See my post of June 30, 2006: don’t charge back time; May 14, 2006: multiple rates; May 31, 2006: Pandora’s box; Nov. 13, 2006: three ways to encourage clients to still use internal lawyers; Nov. 20, 2006: embed costs of lawyers in business unit budgets; May 16, 2006: chargebacks to clients; and Jan. 27, 2008: selectively charge for time servicing clients.).
I know that hours can be gummed up, but mostly that allocation systems accomplish the same goal – sharing the costs of a company-wide resource and some market discipline on the use of in-house talent – without the administrative load.