The louchébem word-creation process resembles that of largonji, verlan, and javanais, in that existing words are camouflaged according to a set of rules.
Strictly speaking, louchébem is a more rigid variety of largonji in which the ending -èm is obligatory.
Despite the name, louchébem seems to have been created not by butchers, but by inmates at Brest Prison, with records dating back to 1821.
[1] Edmund Clerihew Bentley used the language as a plot point in his 1937 short story "The Old-Fashioned Apache".
There is another French argot called largonji, which differs from louchébem only in the suffix that is added (-i instead of -em); the term is derived from jargon.