Students of Professional Responsibility might remember Picker International v. Varian, the case where the court held a lawyer cannot drop a client "like a hot potato" in favor of a new - presumably more profitable - one.
Proving that these things really do happen... here is a story from today's Law.com about a San Francisco Bluetooth headset maker (Aliph Inc) who has filed a motion to disqualify the firm for an opponent in a patent case arguing that the firm (Fish & Richardson) "played an unseemly game of hot potato by dropping it as a client and then turning around and suing for patent infringement the very next day."
According to the story, Aliph hired the firm to do FCC regulatory work in May. In December, the the firm tried to get Aliph to consent to the firm's representation of an adverse party in litigation. Aliph refused to waive the conflict. A month later, the firm sent an e-mail to Aliph on saying, "Unfortunately, . . . we can no longer represent Aliph on regulatory matters without Aliph's consent to the firm being adverse on IP matters unrelated to our regulatory work. . . ." The next day, Fish filed the patent infringement suit for another client against Aliph in the Eastern District of Texas.
The full story is available here.