The lawyers had been due to protest against the rule of Pervez Musharraf, the Pakistani president.
Syed Imtiaz Hussain, a police officer who suffered wounds to his legs and groin, said: "There were about 60 to 70 policemen on duty when a man rammed into our ranks and soon there was a huge explosion.
"I saw the bodies of other policemen burning. It was like hell."
Aftab Cheema, senior superintendent of police in Lahore, said: "A man came on a motorcycle and police stopped him when he approached the police post, then he blew himself up,"
"Most of the casualties were policeman. There were a large number of police posted outside [the court] because the lawyers had planned a rally against the government today."
Police bomb disposal experts estimated the bomb contained up to 14kg of explosives.
Pakistan has seen a wave of bomb attacks in recent months, but there have been none in Lahore, the capital of Punjab province.
Al Jazeera's Kamal Hyder in Islamabad said that Lahore had previously been relatively safe and secure with the last attack coming in 1997.
"This suicide attack ... is indeed a signal that the suicide bombers can reach any city that they want and today's attacker obviously was attacking the security forces as that was the direction in which he ran," he said.
'Terrorism and extremism'
Musharraf condemned the attack and reiterated his resolve "to continue the fight against terrorism and extremism and not to be deterred by such acts," the state Associated Press of Pakistan news agency reported.
The blast comes two weeks after the assassination of opposition leader Benazir Bhutto in a gun and suicide bomb attack in the northern city of Rawalpindi.
In 2007, more than 800 people were killed in attacks, mainly suicide bombings targeting the security forces.
The majority of those attacks have taken place since July, when the army raided a pro-Taliban mosque in the capital Islamabad, killing at least 100 people.