If that should happen to you, simply refuse. That's not worth it no matter what. You're basically asking for having a conflict of interest just when you need your lawyers most, which means you'll have to bring another set of lawyers in.

And nothing will increase the bills faster than two sets of lawyers haggling over different ways to split the same hair.

I agree with all your advice, this is one of those comments that you should print out and nail to the wall over your desk if you plan on incorporating in the near future.