In a speech to the New Zealand Bar Association, Mr Finlayson said courts were backlogged because "the overall standard of the bar, and particularly the criminal bar, is not high enough in New Zealand".
He said he was considering giving judges the power to fine lawyers who wasted time and increased court costs.
"Too many lawyers practising at the bar are incompetent, or worse, and there is no proper means of assessing their competence or requiring them to be properly educated.
"We have tolerated them too long. Something needs to change. We cannot, as a profession, tolerate those who, whether wilfully or not, undermine the system and cannot co-operate in the just, speedy and inexpensive determination of proceedings."
Mr Key said Mr Finlayson was an expert in the area.
"He's a highly regarded barrister in his own right and of course, these days, the country's top lawyer (as Attorney General)."
Mr Finlayson was not a person who made comments lightly, Mr Key said.
"If he was making those, he obviously feels very strongly that there are some lawyers that aren't cutting the mustard and that the country deserves better."
