Having taken care of the bandit ambush, the adventurers finally enter Waterdeep through the city's southern Trade Gate. Their fellow passenger Ambassador Sharkal of Cormyr informs them that he intends to have them recognized and commemorated by Waterdeep's Open Lord, the Lady Laeral Silverhand. With little else to do except stick together, at least until the ceremony, most of the adventurers relocate to the nearest (and cheapest) Tavern in Waterdeep's Dock Ward. While Eepersip talks up the bartender for general information on the City of Splendors, Dust plies his trade to part many of the more inebriated customers with some of their excess funds. Pippin later inquires the bartender about more underground dealings, seeking information on personal matters relating to the man he hunts. Meanwhile, Krum wanders through the night, seeing the sights of the squalid Dock Ward and getting the lay of the land.
The next day, Eepersip and Lumornor find themselves a blacksmith to maintain their equipment, while Dust, Neil, Pippin, and Krum try to get their handle on the city and recent events. They learn more about the city's political legacy, and that the city's position of Open Lord has recently changed hands from one Dagult Neverember to the current Laeral Silverhand. Who these personages are is a matter of later discovery. They also learn more about the city's recent bandit trouble. Later that day, they receive their summons from Castle Waterdeep for a small ceremony tomorrow.
Early the next day, the party attend the ceremony, reuniting with Ambassador Sharkal, but also meeting Lady Silverhand herself, as well as her "right-hand", the Blackstaff Vajra Safahr. There, under some amount of backsniping between the Open Lord and the Blackstaff, they are recommended by Sharkal to get to the root of the bandit problem. It seems the Lords of Waterdeep suspect that the bandits are too well-trained, well-equipped, and well-organized to be simple highwaymen. They suspect some foreign power is behind it. The group are tasked to find who or whatever is supporting the bandits. They accept.