What is the best way to solve this modifier issue?

Would adding the word “both” after “likes” solve the problem?

@hawaii_jake Thanks. However, interpretation 1 is still possible even with the word “both” after likes.

@weeveeship : If it was worded with “both” as I mentioned, then in my mind it reads almost exactly like you have #2 explanation above.

In a business context, Bob likes both litigation and transactional work.

Bob likes business litigation and business transactional work.

Bob likes litigation and transactional work, both involving businesses.

Bob likes corporate litigation and business-oriented transactional work.

Bob likes to work in a business setting where he can focus on either litigation or transactional work.

Bob’s legal interests are in business-related transactional work and corporate litigation.

(Not sure if my suggestions change the meaning slightly. I’m good with grammar, but not too familiar with the topic.)

Bob likes doing work involving businesses, both litigation and transactional work.

I like the original sentence and I don’t see any ambiguity in it. More contextual information can make a difference in cases like this, but since you don’t provide it, we can only make assumptions based on the lexical meanings of the words that form the sentence.

We can assume that:
1. Bob is a corporate lawyer because he litigates (conducts lawsuits) and deals with transactions (business agreements).
2. Bob is a businessman who likes to solve his business problems through litigation (with his lawyers) and likes to deal with transactions.

In either case no element suggests the litigation he likes is of a non-business nature so it is understood that both actions litigate and do transactional work involve business. Therefore, I think the original sentence conveys your option 2.
IMO option 1 can only be possible if there is a contextual element that suggests that he likes litigation in general.
As stated by others above you can rephrase this in a number of ways. However, in business writing is better to KISS, so I’d stick to the original sentence. If you still want to make it more precise then I agree with @hawaii_jake simply add both after likes.