Both you and your friend could be responsible for engaging in illegal copyright infringement. You infringed by using images from Google when you assisted in creating your design. Your friend induced you to engage in this illegal conduct and is liable for inducement. Further, your friend owns the web-site and liable because he displays the photographs or images on his web-site. Both of you are responsible---it does not matter that your friend "told you" to use the images. You are an adult and that means you are responsible for your actions. Since there is no contract pursuant to which your friend agreed to indemnify you for copyright infringement, you are jointly liable with your friend.
Hi. People are under the constant misguidance that if you find an image on the Internet, you can use it. Copyright law extends onto the net. There are many web sites where you can legally download and use public domain images. Copyright infringement requires access to copyrighted material and creating a substantially similar copy. Downloading and using fulfills these elements. It is always best to take your own photos and avoid any copyright issues.
Both of you are liable for infringement. This is why you should never copy an image off the web without a license or documentation that it is public domain. Your best bet is to negotiate a settlement and learn from the experience. 1) always produce a written agreement for your work and 2) do not steal other people's work. If you are going to be in the web design business, you may get short term success by pirating images without licenses, but eventually it will catch up to you and you will have many angry clients who will likely sue you when they have to pay Getty Images, etc. to avoid copyright lawsuits.
This is not legal advice. Even if it were, fee legal advice is worth what you pay for it. The facts of every case are different and should be addressed by a competent attorney who has all of the facts.