The Faculty Lounge:  U.S. News and the Price of Legal Education, by David Yellen (Dean, Loyola-Chicago):

Average tuition at private law schools has increased from under $8,000 in 1985 to around $40,000 this year,
growing at more than twice the rate of inflation.  Graduates have an
average law school debt load of over $100,000.  This has become an
extremely troubling trend as the job market for law school graduates has
declined. 

Many factors have contributed to this trend, but none more than the impact of competitive forces in general, and the U.S. News & World Report
rankings in particular.  I suspect that before the rankings began,
schools could have charged considerably more, but self-retraint
prevented that.  In one sense, what U.S. News has done is to incentivize law schools to lose that self-restraint.  This is not to "blame" U.S. News
or to deny reponsility for our own decisions.  However, in order
to understand why schools have increased tuition so much, we
must carefully consider the effects of U.S. News. …

Will law schools begin to cut tuition?  With demand for our services
down, and with great competition between schools, that would seem
logical.  However, higher education does not seem to follow this aspect
of supply and demand.  Very few schools have frozen tuition.  Many other
schools have slowed tuition increases to around the rate of inflation. 
Schools are continuing to aggressively court segments of applicants
with merit scholarships.  I know of no law school, though, that has
reduced nominal tuition.  An explanation for this is that charging somewhat less than
competitors does not really accomplish much for a school.  …

Law schools are getting smaller, but as I have discussed, this
has a lot to do with rankings.  There is no similar self-interest in
cutting tuition and even if there were, doing both that and enrolling
fewer students would be extremely difficult.  It is unlikely that a dean
could convince his or her university to accept such a recommendation. 

It is possible that external forces will force tuition down.  The
federal goverment might make eligibility for federal student loans
depend on cost-control measures.  If more states follow the path of the
state of Washington and licence people without a J.D. to do some of the
work that until now only lawyers could do, there will be downward
pressure on tuition.  If the ABA liberalizes its accreditation standards
requiring fewer in-class hours or fewer full time faculty, for
example), big changes might occur in the cost of legal education.