As Dan noted last week, there was another nearly 20% drop in the number of LSAT takers in October. That will almost surely translate into another decline in the total number of law school applicants and then law students, which will put further financial pressure on two-thirds or more of law schools in the United States. And that will, in turn, translate into fewer jobs for new law teachers next year. Already this year, we saw 20% fewer schools at the "meat market" than in 2007; we don't have a clear read on how many fewer positions even those schools that went are filling. A number of schools that went are not sure whether they are really hiring this year. In all the cases I know about, these are schools that are being affected by the declining pool of applicants, including the most highly-qualified applicants.
Given all this, my expectation is that next year, 2013-14, will be an even tougher year for aspiring law professors. The fiercer competition will exacerbate the credentials inflation that has taken place over the last decade (more publications, more Fellowships/VAPs, etc.). Some colleagues think they've seen slightly more emphasis at some schools on candidates with practice experience, but I'm skeptical: it still seems that the bulk of candidates doing well have the traditional academic credentials, plus the usual 2-5 years of experience. But we won't have a clearer picture on that score until the hiring season is over. My own impression is that curricular hiring is dominating more of the process at more schools than usual this year (and it usually dominates in a normal year, but this year seems to be extreme--that, of course, creates fabulous opportunities for schools doing "best athlete" hiring).
Until the application pool stabilizes, law schools are going to postpone or forego hiring. There will probably be an increase this Spring in VAP hiring, but this will be driven by curricular needs, rather than presenting opportunities for scholarly and professional development for those seeking tenure-stream positions. Still, now that the recession has really hit home for law schools, job seekers would do well to take those VAP positions seriously as well.