Season 2 Episode 1 - She Knows

In the first episode of Season 2 of "Suits," Mike is entrusted with handling a major lawsuit, while Harvey faces a difficult decision regarding Mike's future on the team after Jessica discovers his secret. Meanwhile, Daniel Hardman, one of the firm's founders, makes a return after a five-year absence, claiming to have transformed following his wife's death.

Harvey assigns Mike the task of closing an important lawsuit, unaware that Trevor has approached Jessica with information. Harvey must now determine how to handle Mike's secret. When Jessica learns the truth, she informs Harvey and urges him to fire Mike, assuming he is unaware of the deception. Harvey attempts to buy time, hoping to find an alternative solution. Jessica is displeased with Daniel Hardman's decision to come back to the firm.

Trevor informs Jessica about Mike's fraudulent background, prompting her to invite him to dinner at his own expense in order to gather more information. Mike becomes anxious, fearing that Jessica may have discovered his fraudulent identity. However, Harvey reassures him that being invited to dinner by Jessica is advantageous for his career. 

During their dinner conversation, Mike opens up about the tragic death of his parents in a drunk driving accident when he was eleven years old.

The evening goes well. Later, Jessica meets with Harvey at the office and acknowledges Mike's legal abilities. Nevertheless, she insists that Harvey should terminate Mike's employment due to Trevor Evans' revelation.

The following day, Mike arrives at the office blissfully unaware that his secret has been exposed. Harvey confides in Donna, expressing the need to fire Mike before Jessica does. However, when Mike enters the room, Harvey finds himself unable to go through with it. 

Harvey tries to terminate Mike's employment but finds himself overwhelmed by unexpected emotions, preventing him from doing so. Harvey decides not to inform Mike about Jessica's knowledge.

In a public confrontation, Jenny confronts Mike about his kiss with Rachel and reveals that Trevor informed Jessica about it and exposed the fact that Mike never attended Harvard Law School. Jenny ends their relationship and discloses Trevor's betrayal to Mike. 

Harvey assures Mike that he is fighting for his job and encourages him to continue working on the lawsuit related to the Swinton merger. Harvey instructs Louis to go easy on Mike, knowing that Jessica favors him. Louis passes on the task of compiling the redundancy list to Mike, anticipating that Jessica's potential firing of Mike would pique Louis' curiosity.

Donna informs Harvey about the passing of Alicia Hardman. Mike questions if Alicia is connected to the "Hardman" in Pearson Hardman, and Harvey explains that she was Daniel Hardman's wife. Harvey shares the news with Jessica, revealing that he and Jessica forced Daniel to resign from the firm five years ago by threatening to expose his extramarital affair to his terminally ill wife. Jessica kept the matter confidential, presenting the public narrative as Daniel resigned to care for his wife. With Alicia's death, their leverage over Daniel diminishes, leading Harvey and Jessica to attend her funeral to gauge Daniel's interest in returning to the firm.

As it becomes evident that Daniel is indeed returning to the firm with the intention of ousting Jessica as managing partner, Harvey strikes a deal with her. He offers to prevent Daniel's return in exchange for allowing Mike to keep his job. Reluctantly, Jessica agrees to the proposal. Harvey confronts Daniel at his family home and threatens to expose his affair to his daughter if he chooses to come back to the firm.

Nevertheless, Daniel confesses the truth to his daughter and returns to the firm. He gathers all the partners and admits to embezzling funds from clients' escrow accounts five years ago. Despite repaying the money, he acknowledges that he could have faced criminal charges. Daniel claims to be a changed man and seeks his partner's acceptance. Harvey then sends Mike home and instructs him not to return for the rest of the day.

Jessica becomes furious with Harvey's failure to prevent Daniel's return and demands that he fire Mike or face consequences. Harvey points out that if he were to be fired, Daniel would investigate the situation and discover Mike's fraud. This would lead Daniel to conclude that Jessica either knew about it and kept Mike employed or remained oblivious the entire time, reflecting poorly on her as managing partner. Cornered, Jessica is compelled to accept Mike's presence and decides to test his legal knowledge, similar to how Harvey had tested him, though she asserts that she doesn't need a computer like Harvey did.

Harvey indirectly alludes to a personal story about a friend whose mother never loved his father and had an affair, which the child never forgave. This marks the initial reference to Harvey's own troubled relationship with his parents. Donna suggests that Harvey's sour mood may be a result of Jessica discovering Mike's secret or his mother somehow reentering his life.