Victoria's work safety authority is paying lawyers millions of dollars in confidential bonuses to minimise payouts in compensation cases brought by alleged victims of workplace accidents.

In at least one case, a firm representing the authority received more than $1 million in bonuses over 12 months on top of legal fees.

The bonuses are paid out by WorkSafe Victoria, which receives its funding from fees paid by Victorian businesses. The bonus scheme has provoked debate inside the legal community because of the potential it will encourage firms to cut corners in order to maximise their bonus payouts, or devise other strategies that may not be in the best interest of victims or the scheme.

But defenders of the bonus system say it encourages lawyers to deal with cases more efficiently and prevents rorting of the state's workers' compensation scheme.

Leaked files from law firm Lander & Rogers reveal that it has made about $5 million in WorkSafe bonuses over five years by minimising payouts to alleged Victorian victims of workplace accidents. The biggest yearly bonus payout to the firm was $1.2 million in 2010.