I know that reputable service dog organizations screen their puppies at several different times in their life before placement to make sure the dog is a match for its life of service. Guiding Eyes for the Blind (GEB) has the most extensive program which I have heard about to date.
I am sure that there are a lot of folks on this site who have a lot more knowledge of dogs and labs, in particular, than I do, so they might add something to the conversation. GEB has primarily moved to labs because of their temperament and training ability and drive to please. Labs are also a good size to be a guide dog. I think one of the biggest traits they look for is for the dog to be focused on their person, be patient, and to be focused on their task. They breed their own dogs, selecting dogs for the breeding program who have shown all the traits they want. They have a program for the puppies from the moment they are born.
They start handling the puppies at 3 days old to get them use to humans. At 5 weeks, they are separated from mom and start their training -- easy stuff like following a human, looking constantly at a human ("checking in"), meeting people politely and calmly, and sitting. At 8 weeks, they are professionally evaluated using a criteria developed by GEB. This is the first level that some pups don't pass. Some may have health issues which are spotted, but even at 8 weeks some are eliminated as not having the temperament and attention to be a service dog and especially a guide dog.
At 8 weeks they are placed with a puppy raiser. I will then attend classes weekly until the pup reaches 5 months. At every class, the pup is being assessed by a professional trainer. At 5 months, we start going to class every other week and again are being assessed by a professional trainer. At the end of 6 months, I fill out an evaluation, the professional fills out an evaluation and the pup is tested. A pup can be eliminated from the program at this point. If s/he continues on, we do the same training and class routine until the 12 month mark. Then a repeat of the evals and potential for being eliminated from the program. Then continue on until between 14 and 16 months. If the pup is still in the program at this point, it is returned to the training facility in New York and, after a couple days of getting use to the facility, goes through the "In For Training" (IFT) test. If the pup passes this test, this is a day of great rejoicing because it means that the pup has been accepted for advanced training and will now work in harness and learn to guide a person.
The dog will go through 4 more months of professional training and could even wash out at any point in this process. At the end of 4 months, the dog is matched with their human and they train as a team for another month, always being evaluated. Dogs who aren't selected for GEB dogs often go to other agencies as working dogs -- they train for bomb and drug detection etc. So they may have many traits that make them a productive working dog, they just don't have that little bit of extra focus/concentration/patience that makes them a guide dog.