By David Thomas and Mike Scarcella

March 19 (Reuters) - (Billable Hours is Reuters' weekly report on lawyers and money. Please send tips or suggestions to D.Thomas@thomsonreuters.com)

Law firm Jackson Walker moved a step closer this week to resolving the financial fallout from a judicial ethics scandal that erupted when former U.S. Bankruptcy Judge David Jones admitted he shared a home with a former partner at the firm.

The revelation more than two years ago cast doubt over millions of dollars in legal fees Jones approved for Jackson Walker in cases he oversaw at the federal bankruptcy court in Houston. On Wednesday, Jackson Walker and the U.S. Justice Department’s bankruptcy watchdog announced a deal to allow the law firm to settle with nine ex‑clients that claimed the fees they paid were tainted.

The joint stipulation, announced Wednesday in the midst of a multiday evidentiary hearing in Houston, would resolve objections by the Office of the U.S. Trustee to more than $4 million in Jackson Walker settlements.

But the deal does not end a broader battle between the firm and Kevin Epstein, the U.S. Trustee for the Southern and Western Districts of Texas. Epstein continues to seek disgorgement of all fees Jackson Walker earned in cases heard by Jones — more than $11 million.

Spokespersons for Jackson Walker and the Justice Department declined to comment.

Epstein’s office has long warned that the firm’s individual settlements could limit what former clients might recover if a judge later orders broader disgorgement. The stipulation, read aloud in court, neutralizes that concern: it says Jackson Walker and the U.S. Trustee agree the firm’s pending deals with ex‑clients “do not limit, restrict, or affect any court's duties or authority to adjudicate” the U.S. Trustee’s efforts.

The agreement also states that the firm's former clients that have settled "will not be precluded from accepting payment of funds from Jackson Walker." It would preserve the firm's objections to the trustee's arguments and allow it to introduce the settlements as evidence in a future trial.

The stipulation emerged during a hearing before Chief U.S. Bankruptcy Judge Eduardo Rodriguez, who is collecting evidence on the settlements to prepare a report and recommendations for U.S. District Judge Alia Moses, who is overseeing the overarching fee‑dispute litigation.

Moses has not been shy about her skepticism. In a November 2025 order, she put the settlements on hold and criticized Jackson Walker’s efforts to unilaterally reach deals with its ex-clients as “an attempt to circumvent this process and this court’s authority.”

Jones, once the nation’s busiest bankruptcy judge, resigned in October 2023 after acknowledging he had shared a home with Elizabeth Freeman, who left Jackson Walker’s partnership in 2022. The law firm has argued it acted responsibly in its handling of the relationship.

KIRKLAND & ELLIS SAW REVENUE SURGE PAST $10 BILLION IN 2025

In the latest sign that 2025 was a gangbusters year for segments of the U.S. legal industry, revenue at Kirkland & Ellis last year crossed the $10 billion threshold, a 20% increase from the prior year.

The law firm's revenue hit $10.56 billion, while its average profits per equity partner also grew by about 20% to reach $11.1 million, the American Lawyer first reported on Wednesday. The increases, which a source familiar with the firm confirmed to Reuters, come amid double-digit average increases generally among large U.S. law firms, according to reports from Wells Fargo's Legal Specialty Group and others.

Kirkland & Ellis has been the highest-grossing law firm in the U.S. for nearly a decade. It was among a group of nine firms that pledged a combined total of almost $1 billion in free legal work last year on mutually agreed matters with the White House, after President Donald Trump began issuing executive orders punishing a group of firms over their past legal work or political connections.

WEIL FEASTS ON FEES IN FIRST BRANDS BANKRUPTCY

U.S. law firm Weil, Gotshal & Manges has received more than $60 million so far for its work representing auto-parts maker First Brands in a bankruptcy that's shaken credit markets and led to the indictment of its founder and his brother.

U.S. Bankruptcy Judge Christopher Lopez in Houston last week signed off on the firm's request for fees and expenses covering the period between September 29 – the day after First Brands filed for bankruptcy – and December 31. No objections were raised.

Weil said in its fee request that its partners charged up to $2,575 an hour for their work on the case. A Weil spokesperson did not immediately respond to a request for comment.

The auto parts maker said last month it is close to a settlement with creditors, seeking to wind down most of its operations while teeing up separate sales for four of its business lines that are being funded by customers such as Ford and General Motors.

First Brands founder Patrick James and his brother Edward James, a former First Brands executive, were indicted last month in Manhattan on fraud and conspiracy charges over their company's collapse. Patrick James was also charged with running a continuing financial crimes enterprise. The brothers have pleaded not guilty.

WINSTON & STRAWN ON HOOK FOR APPLE FEES IN APP LAWSUIT

A U.S. judge has ordered Winston & Strawn to pay legal fees to Apple after concluding that the firm's client made false allegations in a lawsuit against the tech giant.

U.S. District Judge Eumi Lee in California said Winston's client Musi had made a “factually baseless” and misleading claim that Apple admitted to using false evidence to justify removing a Musi app from the App Store, and ordered that statement stricken from the lawsuit.

“Musi’s complaint is not the paradigm of candor,” Lee wrote. “The complaint gives misleading impressions and stretches the limits of vigorous advocacy.”

Lee awarded Apple legal fees and costs for litigating the company’s bid for sanctions. Lawyers from WilmerHale are representing Apple in the lawsuit, filed last year.

Musi's lawsuit alleges Apple breached the developer program license agreement by removing the Musi app based on third‑party IP complaints tied to YouTube. Apple has denied any wrongdoing.

Spokespersons for Apple and Winston did not immediately respond to requests for comment. Winston & Strawn is poised to merge with Taylor Wessing's UK business later this year; the newly combined firm will be known as Winston Taylor.

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(Reporting by David Thomas)

((D.Thomas@thomsonreuters.com;))