City firms may be intent to push for more flexible rules governing conflicts but they are doing so without the support of the majority of their clients, according to new research.

This month's The Verdict survey of senior in-house lawyers illustrates that corporate counsel remain considerably less relaxed about their advisers' handling of potential conflicts and confidentiality risks than firms themselves admit.

The poll of corporate counsel's attitudes to conflicts found that nearly nine out of 10 in-house lawyers regard the matter as a significant issue, including 22% citing 'great concern'.

The survey also suggests that clients are, at best, ambivalent regarding their advisers' handling of conflicts and confidential issues. Sixty-five percent of respondents said they trusted their current advisers 'to a certain extent' not to act in conflict with their interests, although 35% were confident their advisers would always guard their interests.

Likewise, 72% of clients said they had witnessed occasional cases of law firms acting in a conflict of interest, with 4% claiming to have seen such breaches occur 'often'.

National Grid general counsel Helen Mahy said City firms are pressing to leave as many doors open to new business as possible. "I have noticed it getting a lot more difficult when we tender. We want firms to act for us exclusively – they try to keep their options open."

To some clients, this sort of behaviour is simply unacceptable. Geoff Atkinson, head of legal at Monarch Airways, said:

"Accepting instructions or continuing to act when aware of the possibility of conflict is a product of greed or self-interest. A lawyer in such a situation is either incompetent, dishonest or both – and should be subject to a penalty."

While few take such an uncompromising view on the matter, the majority express unease at the willingness of advisers to push the envelope of acceptable behaviour regarding potential conflicts or risks of confidential information being passed on.

Jonathan Peplow, a senior lawyer with HSBC, said: "Law firms as a whole need to take a long hard look at the way they conduct themselves in this area, and be more transparent and open."

A similarly jaded view comes from Canary Wharf group legal counsel Martin Potter, who observed that he has "never found that Chinese walls are effective to resolve a conflict".

In addition, corporate counsel have noticed little change in adviser behaviour since the Law Society this April introduced its long-awaited revision of ethical rules governing conflicts and client confidentiality. The majority of respondents said the new rules had made little or no difference, while only 9% reported being asked for written consent to accept multiple roles under the rules.

The research was conducted before it emerged last week that a group of City law firms had successfully lobbied to change Law Society guidance to make it easier to win client consent in some cases of potential conflict. The controversial revision effectively allows advisers to obtain consent in their engagement letters, allowing them to trigger exemptions in the rules to ban law firms acting in cases of potential conflict.

One associate general counsel with a major professional services firm, argued that the current controversy over conflicts need a clearer lead from regulators. "It is important that the Law Society develops a strategy for addressing conflicts that enables large firms to apply information barriers that work, while at the same time retaining sanctions to support clients who may feel prejudiced. There is a need for rules that balance adequately the interests of large law firms and their clients, with consistent enforcement."

Anthony Hobley, legal head at carbon trading company Climate Change Capital, explained the difficulty of dealing with conflicts in an emerging sector. "Because of the limited number of firms that have expertise in climate change, we run into both legal and commercial conflict time and time again. We want to use the best and it is a balance between getting the best people for the job and managing any conflicts – if I trust the lawyers I am working with, I will be flexible."

He added: "Conflict should be reasonably robustly regulated but choice should not be removed from the client."

A desire for a degree of autonomy in this matter is widespread among in-house lawyers, with many arguing that while they do not view conflict situations favourably on the whole, they would be prepared to negotiate if they were kept informed.

Mahy summed up the argument with her personal view: "Advisers will find me as reasonable as I can be. I expect to be an important client to them and to be treated as such."