Harvey is so determined to stop Jessica from merging the firm with Edward Darby's that he sues three of Darby's clients. Not to sabotage the merger outright, but as a bet. If Darby loses, he takes his tea and crumpets and goes home. Whereas Jessica says that if Harvey loses, not only with the merger happen, but also Harvey will have to stick around to try to earn his name on the door the hard way. As we know, Harvey is not accustomed to losing. But Darby's good and in this case, Harvey may have bitten off more than he can chew.
At the same time, Rachel is angry about the injustice of not getting into Harvard because of Louis's relationship with Sheila Zass. Of course, she doesn't know that wasn't actually a factor, so she drafts a letter of complaint and asks Mike to sign it -- what with him being a Harvard alum and all (which, yeah, that's another thing she doesn't know). Mike isn't about to do anything of the kind, because he's not, so he brings it to Louis, who already has his hands full butting heads with his counterpart at Darby's firm (and then making friends with him, and ultimately screwing him). He tells Mike the truth and Mike gives Louis a day to tell Rachel.
With Louis's help, Harvey brings up information on the merger to delay the lawsuit with Darby, theoretically buying him and Mike enough time to find something to win the case against Darby's clients. But Jessica finds out about it, and she's not only mad at Harvey's violation of the Chinese wall, but she also takes Darby's side in the case. Meanwhile, Dana Scott goes to Donna to explain herself and ends up confessing that this merger was how she hoped to end up with Harvey. On Donna's advice, Scotty tries to prove her love to Harvey by leaking a case-winning file to Mike. Harvey refuses to let Mike use it -- such is his deep mistrust of Scotty -- until Donna talks some sense into him.
But when Jessica gets wind of that file, she orders Mike to lose it and to disappear until after the deadline. Mike refuses, but when Jessica threatens to expose him, he's afraid to call her bluff. Plus he thinks Harvey's name will be on the door after the merger anyway, because he doesn't know about the bet. Which means Harvey loses. Harvey's so furious he tries to fire Mike, but Jessica overrules him. Which, per the terms of the bet, she now gets to do, as Harvey just became her and Darby's piss-boy.
Still, Mike's already having a pretty bad day when Rachel confronts him over never having signed that letter to Harvard. She got the real story from Louis and she knows that Mike is lying to her. Things get pretty heated between the two of them and he finally admits to Rachel that he never went to Harvard. Bitch-slapping ensues and then things get heated in an entirely different way.
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We come right into the middle of an argument between Mike and Jessica. Mike is refusing to do something, saying Harvey will never forgive him. Jessica informs Mike that his problem is with her in a way that Mike can't help but interpret as a threat. Don't worry if you're feeling lost; this is probably just one of those tricky openings that drops us into a moment of crisis and them flashes back to the setup.
Yup, here we are. Cut to "Six Night's Earlier," as a tuxedo-clad Harvey enters a schmancy party. Jessica is also there, offering him champagne. Jessica's soon-to-be partner Edward Darby cuts in asking for a word with Jessica, and Harvey skates. Mike is also there, and when he runs into Rachel, he says she seems different. She wants a drink before getting into it. Harvey rolls up, and when Rachel tells him he looks nice, he smirks, "Thank you, so do I." Rachel moves on as Mike and Harvey agree on what a dick Harvey is, although Harvey didn't realize Rachel knew it. Clearly he underestimates Rachel. Harvey asks if Mike brought "it," and Mike pats the breast pocket of his tuxedo like a best man. After making sure Harvey wants to do whatever he's about to do, Mike hands over three separate documents and heads off to get a drink, "while this is still a party."
Meanwhile, Louis hits the bar and quickly runs afoul of a tall, skinny, jug-eared British goon who must be here with Darby's delegation. They insult each other for about five seconds but then it looks like they might find common ground in their shared history of cleansing mudbaths around the world. Except that also becomes a battle of one-upmanship. Meet Louis's new nemesis, Nigel Alexander Nesbitt. At least his middle name is cool.
Harvey finds a little one-on-one time with Edward Darby and hands him the three lawsuits, which turn out to be against some of Darby's clients, on behalf of some of Harvey's clients, for price-fixing. Darby quickly realizes this means Harvey knows about the planned merger (like the gala event wasn't already a giveaway), and politely tells Harvey that he's going to regret this permanently. By which he means he plans to beat Harvey in open court. But of course Harvey never goes to court, so he proposes a wager: if Darby loses, no merger. Harvey doesn't even need to hear Darby's terms, he's so confident in winning. They shake on it just as Jessica comes up, reading the moment at face value. Supposedly.
Outside, though, she's clearly up to speed. She doesn't have a good answer as to why she didn't tell Harvey about the merger, but she says that if he does lose to Darby, she's got terms of her own: "You win, you get what you want. You lose, you stay, you extend your non-compete, and you get a chance to earn your name on the door. Because it's not going up there now." Like it was before?