If you use this variant, at the start of the game, give the Lady of the Lake token to the player to the right of the first leader.
Immediately after the second, third and fourth quests, the player with the Lady of the Lake token chooses one other player. The chosen player takes the two loyalty cards (good and evil), then secretly shows one to the Lady of the Lake player, representing their loyalty.
After this, the player who was chosen receives the Lady of the Lake token.
If you are the Lady of the Lake, you can't choose to look at the card of someone who themselves had the Lady of the Lake token at any earlier point in the game.