You can sue and perhaps get all of the money you are owed and as was initially discussed ($18k or so) plus, since it is a breach of contract type case you can also ask for your attorney's fees.
You don't mention how much experience you have had with this so I'll explain the way the system works.
In a lawsuit, you can always settle if both sides are willing but no one can make you settle the case. The settlement offer is whatever the two sides agree on. At some point it becomes economically feasible to settle and at some point it is the right thing to do but that decision is always the client's. The lawyer is never supposed to "make" you settle.
If a settlement can't be reached, then you always have the option to file suit or, if the lawsuit has already been filed, continue with the lawsuit and try to get a judgment against the other side. After you get a judgment then you can start trying to collect on it by garnishing wages, seizing assets, etc. A judge can sign these orders but they really don't have any other type of power to make someone pay a judgment.
If you do settle your case then that will be all the money you can ever get from the other side for this case. You can't change your mind and seek more in the future so you need to be sure that you want to settle before you do.
Talking with and hiring the lawyer has not hurt your case or your ability to sue or your ability to recover. It has cost you come money but, as I said, you can sue for that amount as well.
It may be that they decided to take a harder line with you since you got a lawyer although that would be unusual. They also may be wanting you to come back now with a counter-offer of settlement, which is the next logical step. All of these settlement offers and negotiations are not admissible at trial so the judge will never know you offered to settle for something less than the full amount you are owed nor will the judge know that the other side offered to pay you something.
You really haven't been harmed at this point by what the lawyer has done, other than you paid the fees.