At the start of The Creeping Shadow, readers discover that Lucy, the fearless leader of the Lockwood and Co. agency, has left the agency that she so dearly loved. In place of her role at Lockwood and Co., Lucy has decided to become a freelance investigator and spirit fighter. She works for whatever company (and whatever person) needs her assistance.
One of the first cases that Lucy works on is that of Emma Marchment, a ghost whose previous life was marked by her evil deeds. To take down the ghost of Emma Marchment, she receives help from the Rotwell Agency, even though that help is relatively limited (Lucy thinks they are useless). Lucy, however, has the all-powerful Whispering Skull, which she uses to defeat Marchment's ghost and to uncover the Source—something which nearly kills her.
The Rotwell agency grows angry with Lucy, who is ordered to destroy the Source (a mummy's head) in the Fittes Furnace, which is where all Sources are destroyed. At the Fitters Furnace, the Source's connection to the world is severed and their danger is reduced significantly. Without ruining the Source, Lucy's agency says, she will not be paid for her work in dispatching the ghost of Emma Marchment. Lucy realizes that she has no choice in destroying the Source, so she goes to the furnace and gives the Source to an employee, who promptly destroys the Source, but also attempts to steal Lucy's Whispering Skull.
After she goes home and falls asleep, Lucy is awoken by a knock on the door from Lockwood, the man with whom she ran Lockwood and Co. with. It had been hard for Lockwood to let Lucy leave their agency, but he eventually did (after it was clear that Lucy had moved on). Lockwood, however, surprises himself and Lucy and invites her to help Lockwood and Co. solve a case. Lucy agrees and rejoins the agency, meeting the agency's new hire named Quill along the way.
Together with her former agency, Lucy begins to investigate spirits around the city—just like in old times. Along the way, Lucy and her friends come face-to-face with participants in the black market, who don't take too kindly to Lucy and her enterprising ways. They also come head-to-head with a ghost who is an informant, a Spirit Cape with magical powers, and two strange mysteries involving two people: Steve Rotwell and Penelope Fittes. But in the end, the Whispering Skull uncovers a deep and dark secret: Penelope Fittes is not who she claims to be. She is a woman named Marissa.
