The Law Institute of Victoria is predicting that the state's court system will be overloaded with unrepresented clients because of inadequate funding for legal aid.
The institute says pay for legal aid work has become so poor and the workload so great that hundreds of lawyers have made the decision to immediately stop taking on cases.
A recent survey by the Federal Attorney-General's department showed that a third of law firms that have done legal aid work in the past have stopped mostly because the rate of pay is about half the going commercial rate.
The president of the Law Council of Australia, Ross Ray, says it is a national problem for all state governments and the Commonwealth.
"The system is really calling out for help and it is time the State and Federal Government paid appropriate attention to the issues. It is the community that loses out and it really is time this was dealt with," he said.
The president of the Law Institute of Victoria, Tony Burke, says the legal aid system in Victoria is in crisis and legal aid lawyers are preparing to down tools.
"We are expecting that as a consequence, there will be delays in the courts," he said.
"The courts will struggle. Judges and magistrates will have to deal with many more unrepresented people. There will be inconvenience. The cost of running the courts will increase. The cost of policing will increase and the cost of corrections will increase.
"For too long in Victoria we have had what is effectively a gaping wound in the criminal justice system and it has been patched over by the unpaid labour of lawyers in the worst-paid sector of the private legal profession. Now that unpaid labour won't any longer be available and the problem will get worse."
Mr Burke says legal aid lawyers were once paid almost as much as they could earn from paying clients, but now they earn somewhere between 15 and 45 per cent of the average private fee.
"The Victorian Bar recently did some research which shows that junior barristers, for example, who in the main would have had at least six years of tertiary education and several years in practice, are earning as little as $36,000 a year," he said.
"And that is sometimes half and less than a half of what is being paid to the public prosecutors at the other end of the bar table and it is even less than what is being paid in the private profession."
Mr Burke says lawyers who take on legal aid cases are now required to do more background work than in the past and they are not getting paid for it.
"We are expecting that some hundreds of lawyers who in the main are doing legally aided work will cease to do this effectively pro bono or charity work that isn't covered by legal aid and that will have a reverberation through the system," he said.
"That happens now. That is beginning today, the practitioners are saying enough is enough. They are not going to continue with this charity work they are not paid for any longer."
The state Attorney-General's office referred request for comment to the managing director of Legal Aid Victoria, Bevan Warner.
Mr Warner is urging lawyers not to stop working for legal aid.
"Well, it would have a significant impact and I sincerely hope that that doesn't occur," he said.
Mr Warner confirmed Victoria Legal Aid had an operating deficit of more than $20 million last financial year, and said there should be more Commonwealth funding.
"Whereas the State Government has provided ongoing assurances in relation to funding sufficient to preserve service levels, the Commonwealth Government has not and services in Commonwealth law matters have had to be reduced by 30 per cent," he said.
"Ten years ago the Commonwealth Government contributed approximately 60 per cent of legal aid funding and last year this figure had dropped to 30 per cent.
"Now Commonwealth's policy is to encourage parents to focus on their needs of their children when they separate and just yesterday I was advised of a situation where a parent on income support had not seen their eight-year-child for some years and having a home with $170,000 equity meant they were ineligible for legal aid to have a lawyer put the case for contact with the child.
"Now the only option available to this parent was to sell or refinance the home and to fund their own action."
Mr Warner says lawyers' fees are now under review.
"Legal aid is committing to reviewing its fee structures to ensure that the time allowances that are comprehended in our fee structures are contributing to an effective court system and one that avoids unnecessary court events," he said.
"But it is important that we align these time allowances with proposed new court procedures that will come into effect late next year and the Law Institute is aware of these plans."
A spokesman for the Federal Attorney-General, Robert McClelland, says legal aid received a one-off funding boost of $7 million last year, including about $2 million dollars for Legal Aid Victoria.
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