Defence lawyer Sonia Vidal, of Queenstown, told the Otago Daily Times she was one of "probably two" lawyers offering legal-aid-funded services still based in the resort.
Low pay rates and higher overheads made it uneconomic for firms to assign lawyers - particularly those with more experienced lawyers and higher fees - to legal-aid cases, she said.
The result was a "real shortage" of legal-aid lawyers in Queenstown.
"For family and criminal work - or essentially all legal-aid work - it puts people who need legal assistance under a great deal of pressure, and those doing legal-aid work. The reality is you aren't earning enough to run a proper practice," she said.
That was particularly true in Queenstown, with its inflated cost of living, Ms Vidal said. She used to employ other staff, but now worked alone to minimise costs.
Up to 70% of her work was funded by legal aid, but courthouse workloads meant lawyers from other centres were often called to Queenstown to work, and claimed both fees and expenses.
Ms Vidal was only aware of one other lawyer working for a Queenstown law firm who was active in providing legal-aid services in the resort and she believed the firm would review its participation in the system because of its "significantly higher" overheads, following the Government's decision last month to cut nearly $1.3 million from legal-aid funding.
"I think they will look seriously at whether they continue it."
The Government's Legal Services Agency, which reimburses legal-aid lawyers for their services, lists 18 providers in the resort but New Zealand Law Society vice-president Anne Stevens has said most on the list took only a few cases each year.
Ms Vidal said funding cuts came at a time of recession, when economic pressures fuelled demand for legal-aid services, particularly in the family court as relationships broke up.
She urged the Government to save money elsewhere, saying Crown prosecutors were paid on average $100 more an hour by the Ministry of Justice than a legal-aid-funded lawyer on the same case.
