Hugh Crisp, the outgoing chief executive at Freshfields Bruckhaus Deringer, is being investigated by the Law Society over the firm's role in Philip Green's failed bid for Marks & Spencer.
The leading law firm, one of the City's biggest, was appointed to act for Mr Green in 2004 when he tried to take control of the high-street retailer. But lawyers for M&S argued in court at the time that Freshfields had a conflict of interest because it had advised the chain on its contract with George Davies, the creator of Per Una.
The judge, Mr Justice Lawrence Collins, agreed. Granting an injunction barring the firm from acting for the billionaire, he said he was "satisfied there is a real or serious risk of conflict".
The Law Society - the profession's governing body - then launched an investigation. Barry O'Brien, head of the team who advised Mr Green prior to the injunction, has been involved with the investigation.
But it has now emerged that Mr Crisp, who is stepping down for personal reasons, is also being investigated. According to The Lawyer magazine, it is thought to be the first time a chief executive has been probed by the Law Society. Senior corporate partners at Freshfields, Gavin Darlington and Tim Jones, are also being investigated.
Legal insiders believe the matter could be referred to the Solicitors Disciplinary Tribunal in early 2006. Should that happen, the probe will be made public. The tribunal has the power to fine guilty solicitors up to £5,000 per allegation, and can also suspend or strike them off.
Mr O'Brien recently pulled out of the race to become Freshfields' senior partner - one of the three top roles at the firm, along with chief executive and managing partner - because of the investigation.
Freshfields said it could not comment on an ongoing case.
The Law Society declined to comment.