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Background
You'll only receive this quest after completing one of the following main quests:
The Man Who Waits,
Through Death's Gate, or
Undying Heritage. At that point a messenger will come up to you and let you know that Lady Webb would like to meet with you. This conversation will trigger the quest.
Walkthrough
If you ask the messenger about Lady Webb, then he'll tell you that she's in charge of Dunryd Row, the group of ciphers who "keep the peace" in Defiance Bay. He'll also mention that she's really old and never leaves her room. You'll find Lady Webb on the upper floor of Hadret House, which is located in
Brackenbury.
When you talk to Lady Webb, she'll reveal that she's aware of what you've been up to lately -- looking into the Leaden Key -- and she'll suggest an alliance of sorts since she's also interested in them. Lady Webb will then offer to share information with you if you share information with her. To start you out, she'll inform you that Thaos ix Arkannon is the leader of the Leaden Key, and that he's been running the organization for the last 2000 years.
To update the quest, you'll need to visit Lady Webb and tell her about your Leaden Key quests:
The Man Who Waits,
Through Death's Gate, and
Undying Heritage. Afterwards, Lady Webb will figure out that the Leaden Key is causing the Hollowborn problem in the area, and that they're trying frame the animancers for it.
Coincidentally, you'll learn that there are animancy hearings going on in Defiance Bay right now, and that some people in the city would like to see animancy outlawed. Lady Webb will suggest that you attend the hearings and divulge the information you've learned. However, to get inside, you'll have to join one of the three factions in the city -- the Crucible Knights, the Dozens, or House Doemenel -- and convince them to give you an invitation. This will require you to complete some quests for your faction of choice, culminating with a finale quest that will link you to that faction alone:
You'll only be able to accept one finale quest, so choose carefully. After completing that quest, you'll just need to talk to the faction leader to get your invitation. If you managed to kill off or alienate all three factions, then as a last resort you'll be allowed to attend the hearings as a representative of Dunryd Row.
To attend the hearings, you'll need to head over to the ducal palace in the
First Fires district, and go to your seats in the balcony on the upper floor. Entering the balcony will start a long cut scene that will end Act II and among other things make the sanitarium in
Brackenbury unavailable for the rest of the game. So if you have any side quests involving Defiance Bay still open, you might want to complete them first before continuing.
When you join the hearings, you'll be allowed to tell everyone about the Leaden Key, and you'll also be able to offer up your opinion about animancy. But before the hearings can conclude, Thaos will take control of an animancer's body and cause him to kill the duc, which will start a riot. Everyone will start attacking the animancers, Thaos will escape, and you'll collapse.
When you come to, a wounded guard will ask you to tell Lady Webb what's happened. To make it back to Hadret House, you'll have to follow the one path through
First Fires and
Brackenbury that isn't being blocked by fighting or burning debris. Along the way you'll witness some fights (that you can join in if you want by force attacking people), and you'll stumble over the corpse of an animancer carrying
Animancer's Boots.
When you reach Hadret House, you'll discover that it hasn't fared any better than the rest of the city. Its rooms will be littered with dead ciphers, and when you arrive in Lady Webb's chamber upstairs, you'll find that she's been killed as well. However, you'll be able to commune with her soul, and so you'll get to witness her final moments. You'll see her murdered by Thaos, but you'll also learn that the Leaden Key is after something in Twin Elms. When Lady Webb dies in your vision, the quest -- as well as the act -- will also come to an end.