As noted, the University of California at Irvine has received approval to start a new UC system law school, the first in several decades (UC Davis, in Northern California, was the last), and only the second in Southern California (Northern California has three: Davis, Berkeley, and UC Hastings in San Francisco). Ethan Lieb (who teaches at Hastings) has already worried that it may affect their student quality and yield, though my guess would be that Hastings has both history and prestige on its side in most head-to-head competitions with Irvine. (Hastings, as we discussed once before, does have an underperforming faculty relative to its market position, but there are signs this is changing.) Most law schools, even most of the top law schools, tend to be fairly regional both in where their graduates practice and where their students come from. The new Irvine law school will have the immediate advantage of association with the prestigious "University of California" brand, as well as affiliation with a strong UC campus (though the latter will probably have less effect, except on a minority of students interested in interdisciplinary studies of one kind or another).
UCLA, the existing Southern California UC law school, will presumably weather Irvine's arrival without noticeable effect. One assumes (perhaps I'm wrong) that Southern California students who don't get into UCLA end up quite often at Loyola Law School (Los Angeles) and the University of San Diego. (To be sure, some So. Cal students probably go to Davis or Hastings or out of state to Vanderbilt or Notre Dame or George Washington or other schools with some national placement power.)
So the immediate question will be how a UC Irvine law school will fare against USD and Loyola/Los Angeles. Both of the latter have strong faculties and are well-established within their legal markets, but are they well-established enough to compete successfully against the "University of California" brand and much cheaper tuition? My guess is that these schools will have to channel more and more merit aid into students also admitted to Irvine, unless Irvine makes a really disastrous set of initial decanal and faculty appointments, in which case USD and Loyola/LA (which already dominate Hastings and Davis in many scholarly areas) may emerge unscathed from this development. (This, I admit, is an optimistic assessment: outside the top 15 or so law schools, it is not clear how much role scholarly excellence of the faculty plays in student enrollment decisions.) There is also the question of the general financial health of the University of California system. Even the one genuinely elite law school in the system, at Berkeley, is not entirely competitive with the other top law schools on faculty salaries, despite having substantial endowment resources that Irvine will not have. This may also present problems for the new Irvine law school, especially given the cost of housing.
If Irvine puts pressure on USD and Loyola/LA, that will have ramifications further down the "hierarchy" of Southern California schools: Southwestern, Whittier, Thomas Jefferson, etc. But the really disastrous--i.e., "school closing" effects--may be felt on the unaccredited law schools, where California leads the nation. To be sure, some of these schools probably ought to close (they collect substantial tuition revenues, but their graduates have very mixed prospects), so perhaps this will not be an entirely unhappy development.
I would be interested to hear from those more knowledgeable about the Southern California legal market. Non-anonymous posts will, as usual, be very strongly preferred. (Posts may take awhile to appear, so only post once.)
UPDATE: A Los Angeles reader points out that the Irvine law school has not, in fact, completed the formal approval process, although it is further along now than at any point in the past. I also neglected to mention the effect on the University of Southern California of an Irvine law school; my guess is the effect will be minimal, as USC has already competed successfully, and for a long time, with UCLA.