Conflict of interest is one of the most awkward conversations in agency life, and most studios avoid having it until a client raises it. That's the wrong order. A written conflict of interest policy sets the rules before anyone signs a contract, and it protects the agency just as much as it protects the client.
What a conflict of interest actually looks like in a creative agency
The obvious case is taking on two direct competitors in the same category. A Melbourne studio producing brand video for two rival superannuation funds is a conflict most clients would spot immediately. But the harder cases are less clear. A freelance director who moonlights for a competing agency. A producer who also consults for a client's largest competitor. An editor who holds shares in a brand your studio is pitching against. All of these are conflicts, and none of them is automatically a disqualifier.
The policy doesn't need to ban every overlap. It needs to define what counts as a conflict, establish a disclosure process, and give leadership a framework for deciding what to do next.
The three sections every policy needs
A conflict of interest policy for a creative agency should cover three things: definition, disclosure, and resolution. Most studios that have a policy at all stop at definition and assume the rest will sort itself out. It won't.
Definition. Write out what your agency considers a conflict. Include competing clients in the same product category, personal financial interests in a client's competitors, and secondary employment or consulting arrangements that overlap with active accounts. Be specific enough that a team member could read the definition and self-assess without asking a manager.
Disclosure. Require team members to disclose potential conflicts before a project starts, not after a client raises them. A simple declaration form, submitted at onboarding and again at the start of each new engagement, is enough. The form doesn't need to be long. It needs to be signed and dated.
Resolution. State clearly how the agency will respond to disclosed conflicts. Options typically include recusing the relevant team member from that account, disclosing the conflict to the affected client and seeking written consent, or declining the work. Document which resolution was chosen and why. That paper trail matters if a client later contests a decision.
Client categories and the "same vertical" question
One of the trickiest questions is whether two clients in adjacent categories constitute a conflict. Two café chains: clear conflict. A café chain and a coffee roaster: depends entirely on the brief and the competitive landscape between them. A policy that tries to anticipate every combination becomes unreadable. A better approach is to define the test rather than the answer: would a reasonable client in either party's position feel their interests were compromised?
That test gives your agency flexibility without leaving the policy toothless. Pair it with a requirement to consult leadership before accepting any new client in a vertical where you already hold an account, and most of the difficult cases resolve before they become disputes.
Subcontractors and freelancers
The policy needs to extend beyond staff. Freelancers who work regularly with your agency may carry their own competing relationships. A subcontractor agreement is the right place to embed a conflict of interest clause, requiring freelancers to disclose any relationships that might affect their work on your accounts before each engagement begins.
This isn't about being restrictive. Most freelancers work across multiple agencies and clients. The issue is transparency, not exclusivity. A director who also shoots for a competitor's agency is fine. A director who is actively pitching that same competitor against your client's brief is not.
How to communicate the policy to clients
The conflict of interest policy should be referenced in your services agreement and summarised in plain language during onboarding. Clients don't need to read the full document, but they do need to know it exists, what it covers, and how to raise a concern if they believe it's been breached.
A short paragraph in the welcome materials is enough. Something like: "We hold a formal conflict of interest policy and require all staff and subcontractors to disclose competing relationships before work begins. If you believe a conflict exists at any point during our engagement, please raise it directly with your account lead." Clear, simple, and it positions the policy as a protection rather than a disclaimer.
When a conflict surfaces mid-project
The harder scenario is a conflict that emerges after work is underway. A client announces a competitor acquisition. A team member discloses a relationship they should have flagged earlier. A new pitch lands in a category you already hold. Each of these needs a response within days, not weeks.
Your policy should name a specific person responsible for assessing mid-project conflicts, usually the agency principal or a senior account lead not involved in the affected account. That person reviews the situation, consults both parties where appropriate, and documents the outcome. The goal is a decision that either resolves the conflict or exits the engagement cleanly, without leaving either client feeling they received compromised work.
Getting this right is part of the same discipline as managing client exits professionally: the way you handle a difficult situation says more about your agency than the situation itself does.
Reviewing the policy annually
A conflict of interest policy written for a three-person studio doesn't scale unchanged to a fifteen-person agency. Review it every year, alongside your other operating documents. As your client roster grows across more verticals, the definition section in particular will need updating to reflect the categories you now hold. Build that review into your end-of-year planning cycle rather than treating it as a one-time task.
The agencies that rarely face conflict disputes aren't the ones that never take on adjacent clients. They're the ones with clear rules that everyone on the team knows before the situation arises.