Any representation agreement for over $1,000.00 needs to be in writing. If the additional 2 hours was $1,000.00, then one can presume the initial 10 hours was for more and therefore, this attorney has violated state bar rules and should consider him/her self lucky for getting the initial fee without a hassle.
Both prior responses from two fine attorneys are excellent advice and frankly, I would do both. Your concern is legitimate for yourself and your future. Go find another gig, keep records as best you can from your current situation, and the more you give to IRS, the more they will potentially reward you later.
Maybe. If you personally did what they are accusing you of doing, then you are a proper defendant OR if they allege this, you are a proper defendant. If you had nothing to do with what is being alleged, you are not a proper defendant. Either way, you are going to have to defend yourself OR you will lose the case. It's probably best to have a sit down in person with an attorney.
Not a legal answer but, please please please get this lady some help. This is highly anti-social behavior and endangered the children's well being and if they are raised by someone who acts like this, they may well have very difficult lives. I am worried for her mental health and that of the children.