The importance law schools have placed on U.S. News rankings mean that schools are engaging in some gaming behavior. Indeed, law schools are - more or less - in the position of taxpayers figuring out how to manipulate the tax code to minimize their taxes. There is a fair amount of play in a number of the reporting rules and schools have taken advantage of this. Some, of course, have crossed over the line and engaged in "tax fraud".
Like the IRS, U.S. News has been modifying the rules to try to stop the gaming. Most recently, it switched to using the 25th/75th percentile LSAT and GPA numbers rather than the median numbers, reasoning that since the former are reported to the ABA, law schools would be less likely to fudge them.
We found that two strategies seemed to have worked in raising median LSAT scores. (Note, we simply examined the data - we didn't interview all 190 or so schools to see if they had explicitly adopted these strategies for U.S. News purposes.)
Schools can decrease the first year class by cutting from the bottom of the admitted pool (and, if they want to, make up the revenue by increasing the number of transfer applicants they take, since transfer applicants don't count for U.S. News purposes.) We found that schools in the first quartile whose first year class size had shrunk increased their median LSAT scores relative to those who didn't, with a 10% significance level (higher than we'd like, but there were only 44 schools in this group.)
Schools in the other quartiles played a different game - here we saw some schools shifting students from full time to part time (part timers don't count for U.S. News), which we measured by comparing the proportion of total 1L class in the full time program across time. This worked too - a 10% shift from FT to PT gave a 0.54 point median LSAT gain.
There are other games schools can play too - hiring unemployed grads to do filing for a few weeks, for example, fits the "employed at graduation" definition (any job will do).
Some of these games are harmless. Some are not. All are a diversion from competing on educational quality, innovative programs, etc. We recommended that U.S. News consider revising its part time rules (which is likely to hurt a number of schools with large part time programs) and the NYT Magazine story by Alex Wellen reported that U.S. News is considering doing so.
Sidenote: I highly recommend Alex's book, Barman, an account of law school, the bar exam, and practice with the interesting feature of noting the U.S. News ranks of everyone in it. Alex had a much more interesting law school social life than I did; the book offers a perceptive account of legal education. He has a nice web site too.