'Lawyer X' Nicola Gobbo had a sexual relationship with a Victorian policeman then represented a co-accused drug trafficker who was willing to turn on the officer.
The conflict of interest came to light during a royal commission into police use of informers, focusing on Ms Gobbo's dual roles of supplying information to detectives while working as a criminal barrister.
In 2003 she represented a man who was charged alongside four policemen over trafficking $100,000 worth of cannabis, allegedly seized by the officers and passed to the man to sell.
Among the officers, all later acquitted, was then-Detective Senior Constable Stephen Campbell.
Counsel assisting the commission, Megan Tittensor, said they'd received evidence Ms Gobbo had been in an intimate relationship with Det Campbell in the late 1990s and that there was "at least a friendship" between them in the early and mid-2000s.
Ms Gobbo's client, who was later convicted of an underworld killing, pleaded guilty and cut a deal to assist police but later backed out of the offer to help.
Retired Ethical Standards Division officer George Tapai, who was involved in the investigation, revealed he knew why the man didn't go ahead and assist police, but wasn't sure about Ms Gobbo's influence.
"I don't think so," he replied when asked if she might have played a role in the decision.
He said despite the man's initial willingness he later "made it clear that he wasn't going to assist".
Mr Tapai addressed the appropriateness of Ms Gobbo representing a co-accused of Det Campbell.
"Could you be certain in a case where a person had a friendship or a sexual relationship with a co-accused, that lawyer was acting in the best interest of the client?" Ms Tittensor asked.
"I guess not, no," Mr Tapai replied.
He said he would have reported the relationship if he'd known about it at the time.
The commissioner also heard on Thursday from Superintendent Kevin Sheridan, who authorised Ms Gobbo's registration as an informer in 1999.
He confirmed he didn't know she had previously been registered in 1995, after which she as described as a "loose cannon".
Superintendent Sheridan, who has been an officer for 47 years, said the 1999 registration would have been relevant to those who signed her on for a third sting in 2005, in the same way knowledge of the earlier registration would have been useful for him.
He blamed "some administrative error or poor record keeping" for the oversight.
Australian Associated Press