Ally McBeal, 28, and a recent graduate of Harvard Law School, is harassed on the job by a senior associate. When she confronts the partners, it backfires and she loses her job. On the street, she literally bumps into an old classmate, Richard Fish, who offers her a position working for his new firm. She accepts, despite her misgivings about his ethical standards. While being introduced to her new fellow associates, she receives the shock of her career.

The whole firm is angry at Richard for accepting another ridiculous lawsuit that Ling has come up with, but as usual, Richard has no problem telling it as he sees it. Renee inadvertently sets Ally up on a blind date from hell, and this time during the date, Ally gets herself stuck in another tight situation. John is continuously fraught over his relationship with Nelle, and things don't go well when he asks for advice or gets advice when he doesn't even ask for it.

Fish announces that the most unlikely person has been hired as the firm's latest attorney. Appeals to John Cage go nowhere as he feels he has no choice but to support his partner's decision to hire her. Sun Company, in an attempt to minimize their liability and exposure to potential sexual harassment suits when office romances go bad now require romantically involved employees to notify their supervisor of the relationship and sign a "Love Contract" which holds the company harmless if things don't work out. In the heat of the behind-closed-doors argument, Billy reveals his anger over losing the case has more to do with other feelings he is having than with the case itself. He begins to have feelings of jealousy.