Learned the hard way that lawyers are just as messy as the rest of us, and I say that as someone who once hired a plumber only to find out he was my ex's brother. Your situation is way worse though because it was your actual case and your actual money. Small firms run on personal connections so of course cousins and in-laws slip through, they probably don't even think to check half the time. That $450 is the part that would burn me up, like sure you fixed it but why am I paying for your mess. If it were me I'd ask for that retainer back in writing and mention the state bar if they push back, since not flagging a conflict upfront is a real problem for them. Worth checking your state bar's rules too, because most of them require the firm to catch this before they ever take your money.