It was touted as a rescue package for NSW's overstretched justice system, but some lawyers warn that the first wave of changes to Legal Aid rates under a $88 million funding boost would "significantly reduce" their fees and push practitioners to "the point of exhaustion".

The Berejiklian government announced in November that the fees paid to private lawyers acting in Legal Aid cases would be increased over the next four years, after a 12-year pay freeze led lawyers to threaten to withdraw from cases.

The NSW Bar Association said a new lump sum payment would "significantly reduce fees" in many cases. Credit:Peter Braig

While Legal Aid NSW's in-house lawyers provide free legal help to the most disadvantaged people in criminal and other disputes, it relies on private lawyers in almost 70 per cent of cases.

Under the $88 million funding package, the base hourly rate of $150 for private solicitors will increase by $10 on July 1 and peak at $195 in 2023-4. Barristers' fees will increase in the same period.