In South Australia, if you cannot afford a lawyer, you can apply to the Legal Services Commission for a grant of Legal Aid. They will only grant Aid if you qualify under a set of fairly strict conditions relating to property ownership, income, and other circumstances. Typically, they will only grant Aid in criminal matters where there is a risk of imprisonment, family matters where there are insufficient assets to pay for private legal representation (or one party has no access to those assets) or in a very limited set of civil matters.
Criminal Law and Legal Aid:
Strictly speaking, it is possible to run a legal practice acting only for clients who are funded by Legal Aid. It isn't easy though. In criminal law, although they have recently increased the funding, if a solicitor appears for a guilty plea, they are paid less than $500.00. Let me put that in perspective.
You are paid half of that for the appearance (counsel fee) and half for the work you do before the appearance (solicitor fee.) This means that to take instructions from the client, prepare affidavits, and travel to Court, you are only paid about $250.00 That is less than an hour at a solicitors' normal rates.
Taking instructions from a client is a fairly complicated process. Firstly, the solicitor has to contact the prosecutor and ask for the allegations, and any supporting statements. This can take several weeks to arrive, which often means that the first court date has passed, and you have already appeared for the client seeking an adjournment for prosecution to provide documents.
Once you have all the allegations, you have to take detailed instructions from your client. I have sat in on many interviews where the time spent with the client well exceeds an hour. The solicitor has to get instructions relating to the offence, and has to compare the client's story with the prosecution's allegations. Then, a solicitor should take instructions relating to the client's history, offending history, family, education, and anything else that will be relevant to a sentencing magistrate.
Once that is done, the firm prepares a statement from the client summarising all the instructions they have given, so that the solicitor has something to refer to when making sentencing submissions. Often, the client's instructions will reveal that further documents need to be prepared by prosecution, so you have to wait another week or two.
Once all that has been done, (assuming you don't need to seek a psychological report, or other expert witness) you have more than chewed through your $250 grant. After that, you make your appearance at a magistrates court, and the client is sentenced on the basis of your submissions and their guilty plea. You then need to write a letter of report to the client (since they often don't understand what is going on at court) which takes another half-hour... if you are quick.
As a new lawyer, I am NOT quick.
Family Law and Legal Aid:
Family Law is a bigger problem. Although the grant is significantly larger, the amount of work that needs to go into the matter is also significantly larger.
Assuming that you are acting for a client in a children's matter, you need to take instructions relating to the breakdown of the relationship, the child's health and education, the possible housing, and often, the history of domestic violence. Then, if the matter can't be resolved in a Family Dispute Resolution Conference, the matter needs to go to trial. I am not certain of the exact amount that is provided by the Legal Services Commission, but if the matter is protracted (one file I am working on has been going since February 2010...) you work through your grant in a very short time.
Think about a $2000 grant of Legal Aid. At CHEAP commercial rates, a lawyer might charge $300/hour. That is less than seven hours of their work over two years on this file alone. I guarantee that you cannot run a two-year dispute with less than seven hours of time.
Occasionally, you can make some money with Legal Aid. If you are able to resolve a matter quickly and easily, you can be paid quickly and decently. This means that there can be significant pressure on clients to resolve their issues out of court, which CAN mean that they are pressured into accepting situations which are not in their best interests.
On the other hand, paying privately is not in their best interests either. Complex property settlements can take just as long, and cost well in excess of $50,000.