Michael, now forced to work as a paralegal, returned to Genoa City four years later, determined to get revenge on Christine. He did this by representing Phyllis Summers, with whom he also had a brief affair, in the custody battle for her son, Daniel Romalotti. Christine, who was representing the father, Danny Romalotti, ultimately won the case. Michael and Phyllis still remain friends. Months later, Michael begged Christine to help him get his law license back. She agreed, but only after Michael donated a kidney to Danny.
Michael was released from jail and convinced Christine that he was a changed man, so she testified for him and his legal license was reinstated under Chris's watchful eye. The cocky and very successful Michael was a constant thorn in Christine's side, but somehow convinced her to join him in starting a law practice together, Baldwin, Blair & Associates (formerly Baldwin, Williams & Associates). The practice was so successful that she again put having a family on hold, causing a great rift in her marriage to Paul. In a desperate attempt to mend their marriage while still furthering her career, Christine took a case in Hong Kong which would mean moving there for months. Paul first balked at the idea, but then decided to "do it for them", put his career on hold and move. But at the last minute, Paul backed out, so Christine lived in Hong Kong for months on her own with very little contact. Christine was offered a case in Australia when the Hong Kong case was finished, but she turned it down and was determined to go home to Genoa City and try to mend her shattered marriage. She arrived at the apartment only to find Paul in the arms of his new client, Isabella Braña, whom Michael had asked to come to Genoa City to break up Paul and Christine. Without a word to Paul, she accepted the case in Australia and filed for, and was soon granted, a divorce.
Isabella didn't want to tell Paul that she was pregnant because she felt that he was too hung up on Chris, so she had a brief affair with Michael and told him that he was the father. Michael was outraged at first and even drew up legal papers for her sign. But Isabella had something on Michael from the past, so he backed down and went along with her demands of rent, baby furniture, and everything she needed to live until the baby was born. Michael also arranged for a job for her in another town for afterward. Just as Michael was softening to the idea of a child and a future with Isabella, and Paul was getting involved with former wife Lauren Fenmore, Paul found out about the baby's paternity and wanted to be a father to the child. With this major lie, Isabella fell out of grace with both Michael and Mary, Paul's mother. Paul moved in with Isabella and she continued to use manipulating Paul to keep him under her thumb as tightly as possible. Mary went to great lengths to try to convince him that Isabella was wrong for him and would ruin his life, and to convince Isabella to go away to a home for unwed mothers. All despite the fact that Isabella was providing Mary with the grandchild, and Paul with the child, they both had always wanted. Mary even begged for help from unlikely sources in Lauren, Christine, and even Michael - all of whom she disapproves as well, but had had no luck at all. But Paul moved out on his own volition when Isabella started pressuring him to get married. Their baby boy, Ricardo, was born, but unlike Isabella's delusions, Paul was not willing to become a happy family with her. Complicating things was the sudden return of Christine, who rebuffed him for the baby's sake, although she still had feelings for Paul. Paul's response was to marry Isabella.
Christine spent long hours working with Michael and they became closer, sharing dinners and their feelings together. They finally broached the subject of their past, and although Christine agreed Michael was a changed man, it still haunted her. That and her lingering feelings for Paul made it rough on Michael. But Christine decided to put the past behind her and accepted Michael's marriage proposal. Paul invited Isabella's estranged father Ricardo to Ricky's christening, and father and daughter happily reunited. Michael showed up, asked Ricardo not to mention they knew each other or Isabella's past, then announced his engagement to Chris, much to Paul's rage. Paul attacked Michael, who left with a black eye. Paul showed up at Christine's apartment and forced himself on her. This storyline caused a stir among viewers as it was unknown whether it was rape or just "rough sex". The next morning Christine tracked Paul down to a deserted beach in Los Angeles where she initiated sex herself. Later Chris disappeared, leaving both Michael and Paul wondering. Christine was gone for months when the guilt got to Paul, and he told Isabella that he and Chris had sex that night. Isabella left him, only returning occasionally to see Ricky.
Chris returned in disguise as the dark-haired mysterious Kelly Simmons, bent on getting information on Isabella. Paul saw through Chris' disguise, and they came to an understanding about the "rape", but Paul chose Isabella and his son. Paul took Ricky to Isabella's parents in L.A., leaving her to finish packing for their move there. Just before they were to be married, Michael confessed to Chris that he set up Isabella to meet Paul so she and Paul would split for good, then Michael could have Chris. Chris exploded, walked out on Michael, and flew to L.A. to tell Paul the whole story. Upon their return to Genoa City, Paul moved back into their former apartment with Chris, while Isabella plotted revenge.
One night, Isabella called her only friend, Diane Jenkins (Susan Walters) who was with Michael, telling them someone was breaking in then screamed. When Michael arrived he found what appeared to be a bloody murder scene and Isabella missing. Christine woke up unconscious in her car in the woods and told Michael and Paul of her only memory - Isabella screaming not to hurt her, of blood, and a boat. Michael tracked down the boat, which was covered in blood, and destroyed the evidence against Chris. The night before Chris was to be arrested for Isabella's murder, she was attacked in her bathtub by a very much alive Isabella, who had drugged Christine's wine, telling her how she had set her up, while wielding a butcher knife. Paul arrived in the nick of time, slugged Isabella and knocked her out. As he was reviving the nearly drowned Christine, Michael arrived and saved them both from the crazed Isabella. The cops arrived and hauled Isabella away. She was committed to a mental institution, and Paul and Christine were free to be together once again. Michael apologized to Chris for all the misery he had caused her, she forgave him and they are still close friends.
Though Michael didn't realize it at the time, his biggest trouble had yet to confront him—his own family. In 2003, Michael was shocked when his half-brother Kevin Fisher arrived after landing in a heap of legal trouble. To help Kevin get a fresh start, Michael allowed him to stay with him. They were soon joined by their mother Gloria. Victoria Newman and Michael began to grow close. They fell in love; however, Victoria left Michael and Genoa City, when family problems became too much for her to handle.
Shortly thereafter, Michael began dating retail store owner Lauren, They initially kept their relationship a secret due to Kevin's attraction to Lauren, but eventually they became engaged, and were married. Kevin, by this time, had gotten over his infatuation with Lauren and was Michael's best man. Victoria returned to town, arriving at Michael's doorstep expecting to pick up where they left off. Michael informed her that he was now married to Lauren, and Victoria bowed out gracefully. A year later, Lauren gave birth to a son, Fenmore "Fen" Baldwin.
Life as a husband and father was good for Michael, but his family troubles where his mother Gloria and Kevin were concerned were just beginning. Michael continued to put his job at risk with his family's endless legal troubles, such as Gloria's involvement in the Jabot product tampering case, Kevin landing in trouble with the government after keeping stolen money, and investigating the murder of Carmen Mesta, who was murdered by Kevin's girlfriend Jana Hawkes. Michael then had to contend with defending Phyllis after she was arrested for blackmailing Sharon Abbott and Brad Carlton about their affair. Unfortunately, Phyllis was convicted and sentenced to six years in prison. After a few months, her conviction was overturned and she was released. Michael was then blindsided with yet another case when Victor was charged with the murder of Ji Min Kim. However, the charges were dropped when Michael discovered that the star witness had actually lied about Victor's whereabouts.
Michael decided to resume the search for information on his father, River Baldwin. His grandmother's journal described Lowell as a substance abusing criminal; Gloria, on the other hand, described Lowell as handsome and charismatic. Shortly after Michael was born, though, Lowell was drafted and fled to Canada. With these new bits of information in hand, Michael decided to start searching for his estranged father in Canada rather than the United States. He had given up the search by the time of his brother Kevin's marriage with Jana at an ashram. There he met his father, who married them, and is going by the name River. He claims he has been on the run after falsely accused of murder in a protest-gone-wrong in the sixties. Michael returns to Genoa City, disturbed, and several weeks later Lowell shows up at Michael's doorstep. After he and Gloria spend a night reminiscing, a jealous Jeffrey Bardwell tips the FBI about Lowell's location and he is arrested in a diner just before catching a bus out of town. Just as he is about to be moved to a new location for custody before his trial, his daughter Eden Gerick, who would also be Michael's sister, arrives in Genoa City, and pleads Michael to be her father's lawyer.
On March 23, 2010, Michael discovers that his wife, Lauren Fenmore had made out with his client and her ex-husband, Paul Williams for one night. Michael later lets go of Paul and tells him to find a new lawyer. Later, Lauren says she was drunk at the time and she was possibly being drugged as someone took pictures of her with Paul at Jimmy's Bar.
In June 2010, Michael is shocked to learn from Lauren that Jill Abbott is her paternal half-sister, and he shares in his wife's anger over Jill changing her last name to Fenmore.
Michael does try to convince Lauren to at least give Jill a chance, but Lauren stubbornly refuses to do so due to Jill filing a suit asking for a portion of the estate of her and Lauren's late father Neil Fenmore. He is later relieved when the two women work out their differences and start developing a sisterly relationship.
During September 2010, Michael focuses on Victor Newman and his case against his daughters, Victoria Abbott and Abby Newman.
In spite of all the crazy things that go on in his life especially those incidents that involve either Gloria or Kevin or both, Michael always tries to make time for Lauren and their son.