The New York Times recently published a perhaps not surprising article on the decline in the total number of law school applications.
The legal field has had such a dismal run of it the last few years: practicing attorneys laid off, no jobs for new graduates, and bad press and lawsuits for law schools. Given all that, it's not surprising the law doesn't seem like the shining star profession it once appeared. (New York Magazine did a feature on the lawsuits about a year ago.)
However, the ABA has compiled a list of 10 markets that might be decent choice, for a recent grad willing to relocate. They seem to be concentrated in the Southeast, but there are a few in other areas.