Ally McBeal, attractive recent graduate from Harvard Law School, is harassed at work by a senior associate. She complains to the powers that be but ends up losing her job. By chance, Ally bumps into former classmate Richard Fish, who invites her to join his new firm. Ally hesitantly accepts and receives the shock of her life on the first day: her childhood sweetheart Billy Thomas is an associate at the firm.
Ally is dismayed to be assigned as a litigator for humiliated firm partner John Cage. On top of that, Fish invites Ally to dinner with potential client Ronald Cheanie without telling her their outing is actually a double date. Ally's fury over being set up quickly cools when she sees Cheanie kissing Fish's girlfriend in the restaurant bathroom.
Ally senses Cheanie is hiding something when he avoids kissing her after their first official date. In the office, Ally helps Georgia with an age discrimination case where the opposing litigator happens to be Billings, the man Ally sued for sexual harassment at her old firm. Ally tries to be taken off the case but Fish admonishes her for putting her personal life before the interests of the firm.
Ally is asked to be a pallbearer at the funeral of her ex-law professor who also happens to be her ex-lover. The widow, thinking her husband was a great mentor for Ally, asks her to give the eulogy. Ally's reluctance leads Billy to find out the truth about her reasons for avoiding the funeral. Billy offers his support to Ally, which unnerves both Georgia and Cheanie.
Ally is arrested for assault and attempted shoplifting after an altercation with a hostile woman at a grocery store. Renee bails her out but word spreads quickly around the office. Ally is brought before the State Bar Review Board where her unconventional past and eccentric behavior is held up for scrutiny.
Ally agrees to help defend a friend of Whipper's who is being charged with solicitation. Serving second chair to John Cage on the case proves to be a strange and unusual experience when his idiosyncrasies become increasingly difficult to ignore. To top it all off, an obese attorney on a different case passes out in courtroom hallway and Ally has to give him mouth-to-mouth resuscitation.
Billy and Georgia face a crisis of confidence in their marriage while Ally, Cage, and Georgia tackle a ridiculous divorce case. Elaine threatens to sue the firm if Fish does not meet her demands for a better working environment.
Attorney Caroline Poop returns to represent a beautiful delivery woman who is suing Fish and Cage for same-sex sexual harassment. Ally and Renée make a bet over who can tell a better dirty joke at the bar.
Ally is forced to defend a young prostitute up on her third solicitation charge. Much to Ally's surprise, her client is a transgender woman named Stephanie. As Ally grows closer to Stephanie, she begins to realize the true dangers her client faces as a transgender prostitute. Fish, meanwhile, sues his uncle's church for discrimination because of their refusal to hold a service reflecting his uncle's prejudice against short people.
Three successful, intelligent adults approach Judge Whipper Cone about legal representation in their quest to legally obtain a three-way marriage. Fish assigns Ally and Cage to the case, despite Ally's opposition. Holiday Blues permeate the office, causing several complications for the couples in the firm.
Ally struggles to get her biological clock under control when she starts having strange libidinal impulses. She, Renée, and Georgia are enamored with a particularly well-endowed male model in their sculpting class. In the office, Ally has to defend the nineteen-year-old son of a senior partner accused of assault for slugging another guy who harassed his date.
Ally gives Glenn, the model from the sculpting class, the cold shoulder during a chance encounter at a coffee shop. John Cage takes on a case in which the adult children of a plane crash victim sue the airline for the wrongful death of their father.
Ally and Renée are bridesmaids in a friend's wedding and become fed up with the absurd rituals and traditions. Richard asks Ally to flirt with a wealthy new client. To Ally's annoyance, Cage has no problem with it because of his new therapy regimen. Ally and Georgia try a case about overturning a warden's decision to refuse marriage for a prisoner serving a life term.
The firm takes on a case for a famous 80-year old artist who is battling his heirs for control of his estate. Ally and Billy co-council the case and find that the artist's relationship with his recently deceased wife mirrors their own. Fish intervenes in the relationship between Cage and Ally when she starts behaving in an obviously cold manner around the office.
A high-profile case opens up for Cage and Fish when a jilted spouse plans to sue a U.S. Senator for "interfering with happy marital relations". The Senator's case perversely parallels the awkward love triangle between Georgia, Billy, and Ally. Uncomfortable with how close the case mirrors her own life, Georgia quits the case; Fish and Cage step in to try and keep the Senator from losing his job.
Georgia, Ally, and Renée sign up for kickboxing classes to relieve stress. As luck would have it, Georgia and Ally end up having to face each other in the ring. After much awkward pretext, the fight begins and all civility is lost. Ally tries a case concerning an attractive surgeon who performed an unauthorized and controversial transplant procedure.
Tracey tells Ally to fight the dancing baby. But Greg and Ally get in an accident, Ally is distracted by his dazzling smile, and she kicks the dancing baby, but turns out he might be real. Richard is ready to argue in court defending a woman accusing her boss of sexual harassment, and Billy and Georgia are worried that they might actually win the case.
Ally is turning 28. That is upsetting enough to her but Elaine wants to throw a party at the bar for her, and Greg won't sleep with her and she doesn't know why. She's defending a man in court who was arrested for breaking into his date's house and massaging her feet. She tries to fix things for the couple at the bar, but it's not a good night for Ally. Especially when Renee chooses to surprise her as well and it looks like it's not going to be a happy birthday after all.
John and Ally are defending Renee for her life and career. Renee is upset with John over his antics in court but, when Ally's former fling, Glenn, appears as a prosecutorial witness, John kicks her off the case. Georgia might be pregnant, but she and Billy are unsure about impending parenthood. If only Ally could find a theme song to help deal with Georgia's pregnancy.
A convicted felon tried to escape from jail, and John and Ally are defending him. However, the DA on the case is John's former love from college. Ally saw the love immediately, but John is worried that she won't return his feelings. A jilted bride is suing, but when the judge assigned to the case is Whipper, Elaine, Richard and Whipper all have to deal with their unresolved issues of loneliness.
John's second cousin assaults happy people. In court, his defense will be to baffle the witnesses and jury. Two men want a court order to switch their hearts, and Bobby Donnell wants Ally-to help with the case. But if Ally's imagination has any say in it, he will want her eventually.