Alright I got it, so I'm going to drop this off here for future reference on my part.

1. John's family is killed, so he resorts to a life of bounty hunting, outlawing, and becomes a drifter. Three years pass. During these years he has worked both for and against Butcher Bill.
2. Butcher Bill kills Lillie's family, so she is taken into foster care. She soon escapes foster care.
3. John is captured by the government, but his crimes will be forgiven if he manages to track down Lillie and bring her back alive. This isn't John's typical bounty target, but he is forced to comply.
4. John manages to find Lillie after a brief struggle and prepares to take her back to the government. He soon changes his path and agrees to help Lillie track down Butcher Bill and avenge her family.

Lillie has information regarding Butcher Bill that the government wants, which is why they are so desperate to retrieve her. They use John because they know they an bribe him into finding her. John, however, sees a part of himself in her (wanting to avenge the death of loved ones) and also sees his daughter inside of her, so he agrees to help her track down Bill (using the information she possesses). When word that John and Lillie are traveling in the opposite direction reaches the government officials they quickly brand him a traitor and kidnapper and his bounty is raised to staggering amounts.