The Constitutional Affairs Committee warned that legal aid "might not survive" without efforts to enable solicitors' firms to recruit young entrants into publicly funded legal work.
It said the "laudable aim" of ensuring costs were properly audited had resulted in a "wasteful and self-defeating system of cost-compliance auditing, which bears little relation to quality".
Dave Emmerson, chair of the Solicitors Family Law Association's legal aid committee and a solicitor at Edwards Duthie in east London, said the provision of legal aid in family cases was getting worse.
"Every week I hear about a major firm specialising in family law giving up legal aid work," he said.
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