Andrew Morriss (Law, Case Western) summarizes the recommendations here. I would like to comment only on the first recommendation:
Non-elite schools should emphasize scholarships over scholarship.
A law degree is an extraordinarily expensive investment (tuition, living expenses, foregone income). Understandably, students are price sensitive. If law schools outside the top tier want "better" (higher LSAT) students, cutting their price either by lowering tuition or by increasing scholarship awards is a pretty good strategy. Elite law schools face a pretty inelastic demand curve; non-elite law schools don't. They can fill seats at high tuition, but they will lose the competition for the "better" students.
Now, the LSAT is far from being the best measure of whether someone is going to be a good lawyer, let alone a good law student. (It is pretty good at predicting first year grades, not as good at predicting upper class grades, and, of course, says nothing about the other dimensions of a person that might make him or her a good lawyer or student.)
Cutting tuition or increasing scholarships will hit the faculty hard, if done in any serious degree. Faculty slots will have to be left open, teaching loads increased, support for research and travel curtailed. Maybe legal scholarship is better off from having 190+ schools with professors writing articles; but maybe it isn't.
Putting aside whether trying to raise LSAT scores is a sensible or worthwhile academic goal (though I invite others to address this aspect of the post in the comments), I do want to suggest why it might be thought a loss if scholarship were discouraged at schools outside the top ranks.
It seems to me there are two main issues here:
First, most legal scholarship that is useful to practitioners is increasingly produced by faculty at lower ranked schools. A generation ago, for example, treatise-writing was a prestige activity in the legal academy, and so the authors of the great treatises were all teaching at top schools. Now treatise-writing is less favorably viewed by the elite academy, though treatises are probably no less useful to those in practice and on the bench. As a result, the new generation of academics doing the work of Farnsworth and Wright & Miller and Prosser & Keeton are rarely at the most highly ranked schools. But treatises are only one example; practitioner-oriented scholarship of all kinds comes out more frequently from the less highly ranked law schools. If those schools cut back on scholarship, that will be a loss to practitioners.
Second, the legal academy is very bad at initial placements of new legal scholars. Contrast this with academic philosophy, and no doubt any other academic field where the PhD is a requirement for the first job. In academic philosophy, recommenders know the candidates deeply, and the hiring schools can avail themselves of a large body of work by the candidate to evaluate. As a consequence, the norm in philosophy, like most of the academy, is for the first placement (or the first placement within 2-3 years of degree) to be the best (i.e., the most highly ranked unit, broadly speaking). It is almost unheard of to see the "rags-to-riches" saga that unfolds all the time in the legal academy: George Priest starts at Puget Sound and ends up at Yale; Patricia Williams starts at Golden Gate and ends up at Columbia; Jack Balkin starts at Missouri/Kansas City and ends up at Yale; Fred Schauer starts at West Virginia and ends up at Harvard; the list goes on and on. (A partial listing is here.) Why does this happen so often in academic law? The answer is clear: schools base their initial hiring decisions on insufficient information, and so make mistakes all the time. (They also base their hiring decisions on a lot of information of dubious predictive value, which is why most top law faculties are full of undistinguished scholars who got good grades as students and made friends with the right faculty in law school...another day, I'll list some names, but today I'm feeling charitable [this can't last!].)
So the first worry is this: if lower ranked schools de-emphasize scholarship, a lot of very talented individuals are not going to have the opportunity to produce work that, experience has shown, the academy values.
But there's another side to this point too, for it's not like the most highly ranked schools are perfect (or even especially reliable) guides to the quality work and intellectual talent. The top law schools are prone to fads, favoritism of all stripes, in-breeding and the like. As a predictable result, faculty at lower ranked schools are often doing higher quality work. (Remember what Anthony Grafton [History, Princeton] recently reminded us: the intellectual revolutions often come from outside the traditional seats of academic power and prestige.)
I'll make this concrete with a field I know something about: law and philosophy. There is no question in my mind (and I know others share this view) that Bill Edmundson at Georgia State University and Robin Kar at Loyola Law School/Los Angeles--just to take two cases from the legal academy I know something about (no doubt there are others)--are doing work on a par with (in general, better than) a significant number of tenured and tenure-stream faculty at top-ranked law schools. Perhaps law and philosophy is sui generis, and the same is not true in legal history or law and economics. But I'd be skeptical if that was really the case. My guess is that any expert can think of numerous instances in which the "irrationality" of the market has made itself apparent. (I am assuming, arguendo, that in a "rational" market, candidates will select the highest rated school, more or less, at which they can secure an offer. Obviously, this assumption is defeasible.)
Of course, none of this speaks to a final, possible objection: namely, what is all this scholarly productivity really worth anyway? The bottom line, in all disciplines, is that 99.9% of what is produced has no lasting value. The problem, of course, is that it's very hard to determine in advance what will have the lasting value and what won't. Thus, the real question is: do we want the academy to produce the work of lasting value? And if the answer to that question is "yes," and given our epistemic limitations, then I see no alternative than to hope that the academy as a whole encourages scholarship.