The SRA’s latest, fast-tracked consultation on conflicts of interest is expected to receive a warm welcome in the City.

Indeed, it is the City of London Law Society that has been pressing for the reform, which will allow law firms to act for ‘sophisticated’ clients in any situation in which there is a conflict of interest, apart from litigation, as long as they consent.

The CLLS argued that the current rules were tying lawyers’ hands unnecessarily, being overly protective of clients who were sophisticated enough not to need that protection, and indeed who would rather not have to keep finding another adviser because their usual firm was conflicted out on a deal.

For some sectors that is undoubtedly true. When it came to the recent banking crisis, there were only just enough magic circle firms to go round, and banking is the type of sector that is likely to be fairly relaxed about the rule change.

But not all clients will welcome the move. General counsel in some corporates are adamant that they would not want a firm that acts for a major competitor – and especially not on the same deal.

Smaller corporate law firms will miss out on the rule change because they won’t be ‘properly resourced’ enough to have the capacity to provide separate teams to act for each client, plus another team or individual who can make ‘dispassionate and independent decisions’ about whether or not the firm can act.

But they may also miss out in another sense, because there may be less opportunity to pick up work from the big firms that were unable to act because of conflicts.

For the magic circle and other big players that do take full advantage of the rules, it may be a bit of a culture change. Will partners acting for different clients on a deal have to start avoiding each other in the lift?

But there is also a more serious concern that when it comes to tough negotiations, it will be far harder to do the best for your client in an uninhibited way when the person on the opposite side of the table is actually one of your own equity partners.

Whether clients will be happy with that remains to be seen.