Jackson Walker, one of Texas’s largest law firms, has agreed to pay US$15 million to settle litigation over its failure to disclose that a former partner, Elizabeth Freeman, was in a long-running romantic relationship with the federal bankruptcy judge, David R. Jones ,who was hearing cases involving the firm. It sounds like a textbook lesson in how not to do legal ethics, and it isn’t quite over.
The crucial caveat here is that Jackson Walker is not admitting wrongdoing and has consistently maintained it acted appropriatelyand that the moment it learned of the allegation, Freeman was instructed not to work or bill on any matter before Jones.
The US Trustee, the Justice Department’s bankruptcy watchdog, saw it very differently, and had been trying to claw back more than US$20 million in fees the firm earned across some 34 cases connected to Jones while Freeman was on the payroll. Under the term sheet filed in early August, the firm pays $15 million and signs up to a suite of conflict-screening and disclosure reforms. A federal court still has to approve it.
The backstory here reads like a bankruptcy-world soap opera. Jones once the busiest bankruptcy judge in the country, and the man who turned Houston into a magnet for big-ticket Chapter 11 work resigned in late 2023 after the Fifth Circuit opened a formal misconduct complaint against him.
He and Freeman, a former law clerk of his who later made partner at Jackson Walker, had reportedly shared a home since 2017. Jones never disclosed the relationship, nor recused himself from cases she or her firm touched. Discovery later surfaced 2021 text messages between Jackson Walker lawyers suggesting some knew about the romance and were already war-gaming the fallout — including the now-infamous instruction to keep things “down loooooooowww.”
One thing is clear – relationships with the bench are not an “optics” problem but an existential risk. And the $15 million cheque may not be the last word given that the US Trustee has expressly reserved the right to come back for more if evidence emerges that anyone on Jackson Walker’s management committee actually knew about the relationship and stayed silent.
