Just speaking as a player who has been through this, I'd say be careful about making him too effective. Remember, you're putting him up against an unarmed 1st level character. He's what? 2nd level? It's a tough fight as is that depends on some lucky rolls or, by luck, a pc that also happens to be "equipped" for unarmed combat. But... You could do that but have him already wounded, maybe 25-50%, say from Plugg's abuse (make him more obviously sympathetic for the PCs).