DOJ Seeks Jackson Walker’s Partnership Agreement in Ethics Probe

Jackson Walker LLP should be forced to hand over its partnership agreement as part of a probe into whether the firm should’ve disclosed a relationship between a bankruptcy judge and one of its attorneys, a Justice Department unit said.

The agreement would reveal whether the Texas firm’s partners could have removed former firm partner Elizabeth Freeman after they learned of her relationship with ex-judge David R. Jones, the Justice Department’s bankruptcy monitor, the US Trustee, told the US Bankruptcy Court for the Southern District of Texas on Monday.

“Jackson Walker’s Partnership Agreement represents potentially the only contractual basis for what its partners, including Freeman and management, legally bound themselves to do,” the US Trustee said in a motion to compel.

The request was made as part of the US Trustee’s challenge to as much as $23 million in fees Jackson Walker collected in cases involving Jones while it employed Freeman. The US Trustee has said Jackson Walker should have disclosed the relationship.

Jones, Freeman, and Jackson Walker have since been mired in litigation over the lack of disclosure.

Jones resigned in November 2023, soon after he publicly admitted to the relationship. Freeman left Jackson Walker in December 2022.

The firm said it retroactively reduced Freeman’s compensation by almost $79,000 for 2021 through November 2022—the share of partnership profits from cases she worked on in front of Jones, according to court documents filed Monday.

Jackson Walker has refused to produce the partnership agreement, arguing it’s irrelevant to the case, the US Trustee said.

The partnership agreement could reveal whether Jackson Walker took inadequate steps to remove Freeman from the firm or cases Jones worked on, or if Jackson Walker “waited months for Freeman to voluntarily act,” the US Trustee said.

The agreement would disclose what duties Freeman and firm management had, whether they failed to follow those rules, and whether and how Freeman could have been let go for cause, the motion said.

If Freeman had authority to act on behalf of the whole firm, that could show that her actions should be imputed to all of Jackson Walker, the US Trustee said. The agreement would also allow the US Trustee to determine whether Jackson Walker “knowingly continued to accept the financial benefit of cases heard or mediated by Jones,” the US Trustee said.

Jackson Walker has said the US Trustee should be able to find the answers it seeks in depositions it’s taken.

Attorneys for Jackson Walker didn’t immediately respond to a request for comment Tuesday. The firm has previously said Freeman lied to it about the full extent of her relationship with Jones, and has maintained that it didn’t violate any ethical rules or disclosure obligations.

Freeman’s attorney, Tom Kirkendall, declined to comment.

The US Trustee has said some Jackson Walker employees made efforts to seal documents alleging a relationship and that at least three employees knew about the relationship.

Jackson Walker is represented by Rusty Hardin & Associates LLP and Norton Rose Fulbright US LLP.

The case is Professional Fee Matters Concerning the Jackson Walker Law Firm, Bankr. S.D. Tex., No. 23-00645, motion 10/21/24.