There's good news and bad news for almost everyone. Harvey is still pissed at both Mike and Jessica, ignoring one and still planning to execute a palace coup against the other. As for that bribery case he's supposed to win for Darby, his old boss Cameron has both a video of the bribe taking place and some damning testimony from his client's protégé. Harvey tries to talk the witness out of betraying his boss -- because he knows all about being betrayed now -- and when that doesn't work, he demonstrates how he'll tear up the witness on the stand, forcing Cameron to cut a deal.
Louis is reeling after losing his responsibility for the firm's associates, so Jessica throws him a bone: letting him pick an associate for his very own. Louis of course wants Mike, and he plans to go about it properly. This he does by first asking for Harvey's blessing (which Harvey gives), then plying Mike with perks and partnering with him on an unwinnable eminent domain case. But Louis's real closing argument is to Mike, convincing him that it's Louis Time.
We thought Rachel knew everything last week, but it turns out there are a few tidbits she had yet to learn. For instance, the fact that Harvey forbade Mike to tell her the truth the first time they started dating, which she doesn't appreciate at all. But she's even more deeply wounded when Donna admits that she agreed with Harvey, and told Mike as much at the time. Rachel and Donna's friendship obviously takes a serious hit from that revelation, but lucky for Mike, he gets out of the doghouse with Rachel pretty easily.
Jessica and Harvey's relationship remains fraught, even as they work together to defeat Cameron. During their debate over whether Harvey's client should take the deal offered by the prosecutor, Jessica says she would do it all over again, because she'll do whatever it takes to win. You'd think Harvey would appreciate that argument, but he's still got it in for Jessica. Donna points out to Harvey that if he really blames Jessica for everything, maybe it's time to patch things up with Mike. Which Harvey does, mere seconds after Mike said yes to Louis. So Louis gets screwed yet again. Again.
"Holy shit!" are the first words of the episode. They're coming out of Donna, whom Harvey has just told about his plan to take down Jessica. She has two questions: does she get her own office and is Harvey ready to screw Jessica like this. It's like Hollywood Squares in reverse. When Harvey insists he is, Donna's on board. Mike comes in uninvited, announcing that he got a copy of Jessica's blackmail letter, so there won't be a repeat performance of his infamous Harvey-screwing. Unimpressed, Harvey rudely dismisses Mike.
As Mike packs up his soon-to-be-former office, Louis is breaking the news to the associates that he screwed up and so he'll no longer be in charge of them. Rachel's in the bullpen watching as well, for some reason, even though she's a paralegal. He gives them a bit of the farewell speech from Dead Poets Society, and Mike enters with his moving box, just in time to call out a hearty, "O captain, my captain!" Way to suck up to the guy who isn't even in charge any more. Louis hops down off the chair he was standing on, scrambling for a tissue as he makes his exit. Mike remarks to Rachel how much this all sucks, and reports to Rachel that Harvey wasn't exactly moved by his big gesture. Funny, that; Harvey's usually so sentimental. Rachel wishes she could hug him, but they're staying on the DL. So Mike grabs a picture of a dog and pretends to get all choked up about its death to provide cover. Alas, she doesn't take it. That was some good fake almost-crying on Mike's part, though.
In Jessica's office, Louis says that taking his leave of the associates was the hardest thing he ever had to do. Jessica says she can't undo it this soon after the merger, but she's happy to give Louis one associate to mentor. Louis's mood improves immediately (and nerdily) as he confirms with Jessica that he can have any associate he wants. Like we don't know who it's going to be.
Louis goes straight to Donna to ask, high-school like, "If the prom king and his boy wonder are still an item." "What high school did you go to?" she asks. Being Donna, she figures out why Louis is here, and declines to do Louis the favor of asking Harvey for him. Why? "Because it will be so much more fun for me to listen to you ask him." Cut to Louis in Harvey's office, explaining that he wants his new relationship with Mike to be totally consensual… unlike with Sally Jones at the senior prom. Harvey thinks Louis just admitted to a crime, but Louis explains that his mom made him take her because she felt bad for her. "She had four nipples," Louis says. Harvey can't even keep a straight face as he asks, "If that date was so bad, how did you find that out?" The point is, Harvey gives Louis his blessing, confident that Mike will say no anyway. Louis makes sure that Harvey is sincere, and vows that Mike will beg to be his associate. That might be going a little far.