Opposition parties have condemned the government's plans to shake up the legal aid system, warning they threaten to cut off services to the most vulnerable.
The Conservatives said they were "deeply disappointed" with today's proposals, which follow a three-month consultation, saying they risked putting hundreds of high-street solicitors out of business.
And the Liberal Democrats warned that legal aid was a key element of the welfare state and should be protected, not threatened - "which is what these proposals do".
The Law Society also cautioned against cutting funding from areas that "are already not viable", saying it would reduce the number of solicitor firms and "may threaten universal access to justice".
However, the lord chancellor made clear he intended to go ahead with reform of the £2 billion legal aid industry, to move from a network of small firms to a more efficient, market-driven and cost-effective system.
In an interview with The Times, Lord Falconer acknowledged that the reforms, which would introduce fixed fees rather than hourly rates for case work, would result in fewer legal firms.
But he urged solicitors to "knuckle down and work out how it will work in practice", saying there was no option but to back the biggest overhaul of legal aid in 50 years.
Unveiling Legal aid reform - the way ahead, Lord Falconer said: "Our vision is of a legal aid system that continues to provide high quality advice while remaining financially sustainable and fit for the demands and challenges of the 21st century.
"The legal aid system is one of the pillars of the welfare state. It provides access to justice for those who otherwise could not afford it. All of us who work in legal aid recognise this. But we also recognise that it must be sustainable and fair to the taxpayer."
The costs of legal aid have gone up from £1.5 billion in 1997 to £2 billion today - the equivalent of £100 a year for every taxpayer in England and Wales.
A report into the system by Lord Carter this summer said these escalating costs were the result of "systematic weaknesses" in the way legal services were procured, and said a more market-based approach, where firms bid for work, would be more cost efficient.
The Law Society has welcomed the intention behind the reforms, but warned that Lord Carter's recommendations would not work and could lead to the collapse of the whole legal aid system unless they were properly implemented and had sufficient funding.
Vice president Andrew Holroy said: "The lord chancellor's statement about 'knuckling down' will be seen as a slap in the face for hard pressed, hard working legal aid solicitors who may feel they are being pushed beyond endurance."
Today's proposals amend Lord Carter's ideas slightly but essentially they remain the same - prompting Lib Dem constitutional affairs spokesman Simon Hughes to accuse the government of "arrogance, lack of responsiveness and their foolishness".
His Conservative counterpart, Oliver Heald, added: "We remain deeply concerned about the impact of the proposed overall reforms on the network of high street solicitors who provide access to justice for the most vulnerable in society."
He said: "At last year's election the government promised to reform legal aid "to better help the vulnerable". On the evidence of today's announcements it's difficult to see anything but the opposite outcome."