A lookup relationship is required because the Time Entry records must retain independent ownership and a sharing model that is more restrictive than the related Project records. In a master-detail relationship, the detail record ' s ownership and access are controlled by its master. Salesforce states that custom objects on the detail side lose their independent Owner field, and record access can be Controlled by Parent. That would conflict with the requirement for Time_Entry__c to remain Private even though Project__c is Public Read/Write. A lookup relationship keeps the records related while allowing Time_Entry__c to maintain its own owner and organization-wide default. A hierarchical relationship is specific to the User object, while an external lookup relationship is intended for relationships involving external objects.