SLATER & Gordon has confirmed that Julia Gillard faced a fundamental conflict of interest when she represented both a crony of her boyfriend and his union as a salaried partner of the firm in the early 1990s.
An independent legal opinion had endorsed the firm's decision to stop acting for both the Australian Workers Union and AWU official Ralph Blewitt when it became aware of the conflict in late 1995.
Slater & Gordon released details of the opinion in response to persistent media questions regarding Ms Gillard's role in giving advice on the incorporation of the now infamous AWU Workplace Reform Association in 1992.
A police investigation later revealed that her then boyfriend, senior AWU official Bruce Wilson, had stolen more than $400,000 from the association - including $100,000 spent towards the purchase of a Fitzroy property.
Both the formation of the association and the property purchase were done in the name of Ralph Blewitt - who last week gave statements to Victorian police detailing his involvement in the rorting of the association.
As a partner and deputy head of Slater & Gordon's industrial department, Ms Gillard represented both the West Australian and Victorian branches of the AWU.
But she confirmed on Monday that she had been representing Mr Wilson and Mr Blewitt personally when she helped them, for the association, buy the Fitzroy property - and denied she had acted without authority.
''Did I need to separately advise the AWU this was occurring? Of course I didn't. The people I was dealing with were elected officials of the AWU,'' she told a media conference.
Referring to the Workplace Reform Association, she said: ''I was not incorporating this association on the instructions of the AWU; I was incorporating this association on the instructions of Mr Wilson and Mr Blewitt as representatives of a team of union officials who would run together for re-election.''
The senior partners at Slater & Gordon considered sacking Ms Gillard when they discovered in August 1995 that she had helped form the association without advising them or opening a proper work file.
In a statement released on Tuesday, Slater & Gordon responded to allegations that the firm had failed to notify the police or the AWU when it learnt of ''allegations of misconduct by its other client Bruce Wilson'' in 1995.
''Slater & Gordon has consistently maintained, and still maintains, that at all times it has acted in accordance with its legal and ethical obligations in relation to all aspects of the AWU matter,'' it said.
The firm said it had received late on Monday independent advice on those obligations from law firm Arnold Bloch Leibler and Philip Crutchfield, SC.
That advice had confirmed that ''in circumstances where a conflict arises between two existing clients, Slater & Gordon was obliged to, and did, cease acting [for] both.''
The statement confirmed that ''in the relation to the AWU matter'', the firm had ''acted for both a union and a union official [personally].''
In acting for the official the firm had obtained information that was confidential to the official and the disclosure of which to the union would have been a conflict between the interests of the union and the official.
''Slater & Gordon ceased acting for both clients after it became aware of this conflict situation,'' the statement said.
The story Gillard law firm claims AWU case presented conflict first appeared on The Sydney Morning Herald.