Here's how it works. A person is arrested, brought into court, and charged with a crime. At that time, the Court does a quick inquiry to determine if the defendant can afford counsel. Usually the answer is no and the attorney from the public defender's office steps in for the arraignment. This is where the system changes depending on the jurisdiction.
In many jurisdictions, the public defender's office is the first group called upon to represent indigent defendants. These are lawyers who work solely for the public defender's office (or Legal Aid society) whose salary and benefits do not depend on the amount of money they bring in or the amount of cases they handle. The typical public defender has been performing their job for many years and is well known in the courthouse.
Many times there are conflicts of interest within the public defender's office. For instance, co-defendants cannot be represented by the same attorney if they have divergent interests, like if they were found with a gun in their car. It can only be one person's gun and they will inevitably point the finger at each other. Therefore, they each need their own attorney. If there is a conflict of interest, the public defender will remain with one of the defendants and the other will usually be assigned a private defense attorney who accepts assigned cases. The private attorney has a practice and his salary depends on how much business he can bring in. The assigned cases are a good base because they provide a guaranteed amount of money that the government will be paying on an hourly rate.
There is almost always a different pool of attorneys depending on the level of the crime. Most attorneys will be qualified for misdemeanor cases, while fewer will qualify for felonies, and only a handful for homicide cases.
In my jurisdiction, the public defenders only represent defendants charged with "D" felonies and lower, leaving all of the conflicts and serious felonies to be assigned to private attorneys who accept assigned cases. Being a large community, there is no shortage of cases and plenty of work to go around, however, the more attorneys that enter the assigned panel the more the cases get spread around. Some attorneys make a career from only the assigned cases, while others use it just to supplement their other work.
I've worked more jobs than I care to recount in my career (although I did a short list here one time). There is one truth that moves through every job I've had from popping popcorn at a movie theater to trying murder cases - the quality of the employee varies depending on the person. The same holds true for criminal defense attorneys. A public defender or an assigned attorney does not mean a defendant is doomed to the revolving door of the criminal justice system and poor representation by a person just looking for a paycheck. Most attorneys do a great job for their clients, no matter who is paying them. But like every job, there is burnout and frankly people who do not have the abilities to do what they are asked to do. It is easier for me to see the good and bad because I am experienced, but a seventeen year old kid charged with armed robbery being ushered through the jail does not have the same knowledge.
Many times I see a defendant push an excellent assigned attorney from a case because there is an inherent distrust in lawyer's they don't pay for. Maybe they think assigned attorneys and the DA's are in it together or that if they don't pay for an attorney, the attorney will not fight as hard. The truth is whether a person hires an attorney or is assigned one from the court it is a roulette wheel with the quality of the attorney. Like I said earlier though, due to the training and qualification system that takes place in assigned counsel programs, an indigent defendant is likely to get a very capable attorney to represent them. There are some private attorneys who shy away from trials too, because the longer an attorney spends on a retained case, the less money they make. Retained attorneys usually demand the cost of representation up front and the more hours they put in on a case, the less they make per hour on it. The fee is usually up front because clients who are on the losing end of cases are less likely to pay the fee after.
The Bureau of Justice Statistics noted, in 2007, that for the biggest 75 counties in the country the outcome of the case was the same whether the attorney was retained or paid through public funds. That is what I find. Whether it is a retained attorney or a public defender, the outcome never really varies. The judges and ADA's treat each the same.