Legal Question in Legal Ethics in California

I would have to read the retainer agreement in its entirety and be advised of the exact nature of the legal work to even advise you properly.

Although the wording of the fee agreement is no monument to clarity, you seem to understand how it works, and yes it is ethical and legal, not to mention very commonplace. It is really no different from a landlord asking for the last month's rent up front while expecting you to pay the first month when you move in and pay as you live there. There are a few variations, in that the last month's rent is a fixed figure, whereas the last bill on a matter is not, and best practices in the legal industry call for the retainer to generally be a fair estimate of that bill for transactions, and not more than two times the largest expected bill for litigation matters (its more because you'd be amazed at how many litigation clients suddenly don't feel like paying their last couple of bills once they have to settle a case). Other than that, however, the principal is basically the same.