Actually, it's hard to think of a situation in which doing this would not create a conflict of interest, but if you represent a client in divorce proceedings even though you are the one his spouse has been cheating with, that seems like a pretty clear conflict.
Technically, the attorney's violation in this case was held to be "failing to inform his client that he had an affair with the client's wife prior to representing him in a divorce proceeding against the wife," not the affair itself. I guess we could quibble about which ethical rules this technically violates, but the end result is still going to be a suspension.
Luckily for the attorney involved, this happened in Tennessee, which like most states has abolished the tort of "alienation of affection." Among those not having abolished it: Mississippi, where in 2008 an attorney was alienated from $1.5 million after a client successfully sued him for creating a conflict of interest in a similar way.
Link: Legal Profession Blog
