The Toronto-based LAO was formed in 1998 and is primarily funded by the Government of Ontario, although it operates as a separate organisation.
Prior to LAO, the province provided legal aid since 1967 under the Ontario Legal Aid Plan (OLAP) which was managed by the Law Society of Upper Canada. In the early 1990s, government funding limits resulted in a substantial reduction in the number of legal aid "certificates" issued to support cases while many regions of Ontario lacked legal clinic services. The government appointed John McCamus to head a review of the existing system resulting in the September 1997 report A Blueprint for Publicly Funded Legal Services: the Report of the Ontario Legal Aid Review. The Ontario government passed the Legal Aid Services Act the following year to replace OLAP with LAO.