Cook pancetta in a Dutch oven over medium heat, stirring, until it begins to brown, 4 to 6 minutes. Using a slotted spoon, transfer to a plate lined with paper towels.
Add shallots, chard stems and thyme to the pan drippings and cook, stirring, until the shallots begin to brown, 4 to 5 minutes. Add chard leaves, water and lemon juice and cook, stirring, until wilted, about 2 minutes. Cover and cook until tender, 2 to 4 minutes more. Remove from the heat; stir in the pancetta, walnuts and pepper.
Pancetta is an unsmoked Italian bacon usually found in the deli section of large supermarkets and specialty food stores. Regular or turkey bacon may be substituted.To toast chopped walnuts: Cook in a small dry skillet over medium-low heat, stirring constantly, until fragrant and lightly browned, 2 to 4 minutes. Note: After washing the chard for these recipes, allow some of the water to cling to the leaves. It helps steam the chard and prevents a dry finished dish.
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