The St. Joseph School District announced Wednesday that the law firm Mickes Goldman O'Toole is withdrawing from the lawsuit because of a potential conflict of interest.
No other details were provided.
The district hired the firm after the FBI began investigating the district.
The FBI investigation stems from revelations of stipends paid to administrators and staff without board approval.
Chief Financial Officer Beau Musser filed a lawsuit against the district after he claims the district made up sexual harrassment allegations against him in order to place him on administrative leave for exposing the previously secret stipends.