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Mitchell and Cameron seek to assign legal guardians for Lily in case something happens to them. Gloria gets excited at the the thought of having Lily as a daughter, but Cam has reservations over Jay who seems to break self esteem rather than build it. To prove a point, Cameron climbed an indoor rock wall with Jay guiding him, but was dropped by Jay when Mitchell blurted out they were considering them to be Lily's guardian, giving Cam more fuel to put Jay and Gloria in the "No" column. Manny explained to Cam that Jay offered support to him when he had concerns over going on a camping trip because he was nervous about the shower situation. This moved Cam to concede the honor should go to Jay and Gloria, despite Gloria getting Lily's ears pierced.
Claire took Luke to a psychologist without telling Phil, but he figured it out anyway and showed up. This led to Claire's admission that she was afraid Luke would turn out like him, which hurt Phil. In the midst of their argument, they left Luke along in a parking lot where he subsequently managed to make his way home using his personality and street smarts. This led Claire to the revelation that the problem wasn't Luke, it was her need to control.
Haley and Alex bonded over breaking into the school and vandalizing the locker belonging to a rival of Haley's and ended up in jail.