The Criminal Bar's submission, penned by 33 lawyers including eight QCs, said lawyers would be unable to properly represent their clients under the new fixed fees system.
Association spokesman Matt Goodwin is a criminal lawyer in Auckland.
He said the fixed fees regime would undermine access to justice for all citizens and would result in a two-tier system of justice: "One for those who can afford to pay and one for those who cannot".
Mr Goodwin said many people on legal aid had mental health and addiction problems, low levels of education, or had other issues that complicated their representation.
"Their problems will be exacerbated by the loss of experienced lawyers from the legal aid scheme and by those left being unable to do the work in the time allocated.
"There will be an increase in the unrepresented and insufficiently represented. It is likely that rather than saving money, the costs will merely be shifted to other areas of the justice sector, including the Courts and Corrections."
He said changes would also result in a "mass exodus" of young lawyers heading overseas.
"Essentially, it is going to cut off the oxygen to the independent bar because it is not going to be seen as having a future by those coming out of law school."
The Government's move is the latest in a string of changes enacted following Dame Margaret Bazley's 2009 report into legal aid.
She alleged that the justice system had been undermined by more than 200 corrupt lawyers who were rorting the taxpayer-funded system.
The distinguished public servant also accused lawyers of taking backhanders, charging illegal "top-up" fees and grouping together to defraud the legal aid system.
Although Dame Margaret said the allegations could not be substantiated, she said she had been told up to 80 per cent of lawyers at Manukau District Court were "gaming" the legal aid system.
Mr Goodwin said that since Dame Margaret's investigation there had been only four lawyers removed from criminal legal aid.
"Rather than eliminate the small number of 'car boot' lawyers identified by the Bazley Report, fixed fees encourages them to become the norm.
He said Dame Margaret recommended that lawyers operate under a business structure, younger lawyers be mentored and that lawyers deliver a high quality service to their clients and the courts.
"Ironically, the recommendations in the Bazley report are largely going to be defeated by the implementation of this system."
The hearing is to be held on Thursday.
