DOLORES J. COPELAND could have had no idea back in 1974 when she filed a sex discrimination suit against the secretary of labor of the ripples she eventually would make in the public interest legal community.

Copeland ultimately won her case, brought under Title VII of the 1964 Civil Right Acts, when the Department of Labor conceded that it had discriminated against her and other women.

The department's admission came grudgingly, just as the department had dragged its feet throughout the case. When it conceded discrimination, the department also agreed that Copeland was entitled to the "reasonable" attorneys' fees and costs under provisions spelled out in the law.

The question of those fees now threatens to become more significant than the substantive issues posed by the suit Copeland brought. Copeland and other plaintiffs won about $32,000 in back pay, as well as promotions and other benefits. Copeland's lawyers, associated with the prestigious and well-heeled Washington firm of Wilmer, Cutler and Pickering, asked for a fee of $206,000 based on 3,600 hours of work, billed at an average hourly rate of about $57.

U.S. District Court Judge Gerhard Gesell, after hearing objections from the Labor Department to the fee request, wrote a four-page memorandum and order awarding the lawyers $160,000, which he said was based on "the result achieved, the novelty of the issues, the difficulties encountered and effectiveness of the excellent representation. . ." An additional $11,500 was given the lawyers for costs.

The Labor Department appealed, arguing that the award was excessive as were the number of hours spent on the case by Copeland's lawyers, especially in view of what Copeland and the other plaintiffs received as their cash award.

Last October, a three-judge panel of the U.S. Courts of Appeals - Circuit Court Judge Edward A. Tamm, Malcolm R. Wilkey and Senior U.S. District Court Judge Ronald N. Davies-sent the case back to Gesell. They suggested that he should think about the fee question again, but this time "give consideration to abandoning the traditional claimed hourly-fee starting point for [his] calculations in favor of a principle of reimbursement to a firm for its costs, plus a reasonable and controllable margin for profits."

Wags have characterized the appellate court panel's guideline as a proposal to turn law firms into utility companies, with courts sitting as the rate-setting commission.

Alarms went off. Public interest lawyers started talking about the "chilling effect" that the decision would have on big, wealthy law firms that would stop taking public interest cases if it meant that they would have to open their books to public inspection to get paid.

Smaller law firms that specialize in public interest law became concerned that the decision mght deny them the occasional big award that allows them to finance other, worthy cases that they otherwise might not be able to bring. Significant cases, which sometime turn out to be winners but are longshots at the starting gate, might not get brought at all.

What makes the issue critical in minds of public interest lawyers is the conviction that, without their action, government enforcement of antibias laws would decline sharply. And where the government is involved as a defendant, they believe, enforcement would be nonexistent.

Wilmer, Cutler and Pickering decided to appeal, asking the full Court of Appeals to consider the matter. Other groups, including the American Civil Liberties Union, the Council for Public Interest Law, the National Wildlife Federation and the Women's Legal Defense Fund have filed supporting briefs as friends of the court.

The Justice Department, after an internal debate, filed a brief opposing rehearing on the grounds that the panel's suggestion of the cost-plus formula was not a command and that the issue was not "ripe" for rehearing. The matter now is pending.