Do you really want this jerk to be your DD's "Grandpa"?

I would just stay away from the ILs. They are not obligated to treat your daughter as their grand kid, pay for her schooling, or take her on vacation. It's nice to hear about families that do those things for "steps" but...

At least you know who they are up front and what is important to them - money.  Personally I would not want to deal with them and would have little respect for a husband who could be bought by them.  So the house you live in is provided by them?  Figure out what you and your husband can afford and move there.  Live life on your terms and leave the inlaws to themselves.  I would imagine that your DH is sick to death of them by now!

If your daughter were your DH's child, your expectations would be reasonable..But, she is not and they are not. Your FIL, while not the nicest person, was right when he said your child has two parents and grandparents. FIL is not obligated to pay for your child's school or vacations.

The lack of a high paying job rests on your DH. DH made choices, and he continues to make choices, that affect his income. FIL is not punishing him, teaching him lesson, when he expects DH to be an adult and be self supporting. FIL has not abandoned DH if he is providing the home you live in.

You cannot control who FIL invites to his house. In the example you cited though, FIL did not invite BM to  social event. They went into the home office. And while it is rude to work when your lunch company is there, at least BM was not sitting on the sofa next to you.

You need to adjust your expectations.

You guys should move across the country and find your own way in life.

Doesnt sound like your husband can afford to support his family so you are living in his daddies house. To me that if not sexy or attractive at all.

The least of your troubles are Lawyer bm and Lawyer FIL---

jmo---

Move away from the inlaws and support yourselves.

FI, does not have to do anything for your DD.  It's not his blood.  You and Bio dad have to take care of your DD. You two made her.  What is nice, what is right, has nothing to do with anything.  You must understand that you will never have a relationship with your IL,  you must accept it.  You can disengage with your IL not to be hurt 

OP, most of what the other posters are saying is spot-on, but I’ll try to frame it a little differently.  Couch it a bit.  First of all, it sounds like your in-laws are awful.  Many people have awful in-laws; not that that makes it right, but that part, which is separate from being a SP, is up to you to decide how to handle.  As someone said, either best to avoid them or do what most people do with sucky in-laws, and that is see them when only absolutely necessary and know they are what they are.  These types of ignoramus always seem to love throwing their “superiority” around too, which does not help, but it is what it is.

So, that brings us to being a SM, living in a home that was provided by someone else, and a lot of what appears to be DD vs. SD stuff.  First of all, a lot of SMs wind up here because of extremely high and ridiculous expectations that were put on us.  We are supposed to cook, clean, babysit, and even support, someone else’s children, with very little (sometimes even out-right hatred) in return.  The lesson we all learn here is that we are not responsible for anyone else’s children.  Yes, we want to welcome them or at least be okay with them in our own household, but it is ridiculous for society to have the expectation that we are supposed to carry so much responsibility for someone else’s children without any authority.

This is not quite, but kind ‘a where your ILs are at.  Apparently, they don’t want that level of responsibility for someone else’s children.  Which is OK.  That is their choice.  As lawyers, I’m sure they know the risks, especially.  It is “nice,” if with step-families it can be yours, mine and ours; however, this is rarely the case.  Here we look at the realities vs. what looks pretty or what our society as a whole imposes.

Thus, given that, you need to realize that you and your ex- are primary parents for your DD.  Shoot for a cordial relationship with the ILs, SD and such.  However, don’t assume or delude yourself into thinking that they should be or have to be equally loved, and thus treated the same, by all.  They won’t be.  The best thing you could do is prepare your DD for this.  Let her know DH’s daughter will be raised and have things that her affluent family can afford and to chose to provide to her.  Let your DD know that this does not mean less for her; it just means different.  Let your DD know that you and your DH and her bio-dad love her much and you’ll all be doing the best you can for her.  Avoid stoking the flames of any kind of animosity!

Regarding your DH, he is what he is.  If he is in retail, fine.  There is nothing wrong with that.  He may be a very nice gentleman that you feel in love with, who doesn’t make a whole heck of a lot of money.  Nothing wrong with that.  A lot of women fall into that category, and in some cases even make more than their husbands.  However, don’t expect DH’s dad, rest of the family, to provide additional funding.  DH himself should not have this expectation.  Dad chose to give him a home.  That was nice of him.  But neither you nor your husband nor your DD should expect anything further.  Make a life for yourselves with what you have.  See in-laws only when you have to, and enjoy what you have!

As an initial question, what is your DH's undergraduate degree in? (I'm assuming you are aware that a bachelor's degree is required to attend law school, so quitting law school does not necessarily mean a person has no education upon which to have a career.) Is it not in an area by which he could make a higher salary? Second, as a lawyer of 25 years myself (married to a lawyer of 30 years) I can tell you, we usually fall into two categories, those who think they're better than everyone else, and those who are regular people who can interact with anyone, anytime (and if your FIL is really as successful a lawyer as you claim, he obviously has the latter ability but has not chosen to share it with YOU.) It sounds like the problem is the closeness with BM and the fact the FIL practices law with her and obviously thinks a lot of her. With everyone working from home, I think you were out of line to say anything about BM coming to FIL's house to discuss their business. If you're not comfortable with the situation (and I understand how it would make you uncomfortable) then perhaps you and your DH should consider moving far away and making a fresh start. In the meantime, his parents are under no obligation to do anything for your DD. From the way it sounds, they could easily do so (and I bet they conribute to charity annually much more than her dental costs would have been!) but it sounds like they DON'T WANT to do so. In my opinion, that bodes in favor of you and DH moving and making your own life, paying your own way, if he's willing to do so. If nothing else, I'd move out of the house owned by the ILs and try to limit all contact with them. 

Dump and dash?

Holy entitlment batman.  I see the issue all around is entirely you and your DH.  The FIL response is likely a product of being fed up of two parasites with their hands out and then trying to tell him what to do in his own home.  I think overall he was a bit to kind.  Support your own kid FFS.