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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.