I hate sounding like a jaded 3L, but yeah - things are rough for law school graduates right now.
A friend of mine graduated in the top 10%.  She hasn't found work yet.  She's been contemplating opening her own firm.  In the meantime, she found a job in the legal field just recently!  She's proctoring law school exams at the law school.
I wish the positive, rosy outlook was accurate, but I'm afraid that right now, things are far worse than the numbers imply.  Good people are having a hard time getting work.  Those who do are happy to accept lower salaries (most of the folks I know who graduated are happy to earn $40-$50k, with some happy to earn even less.).  As a matter of fact, I don't know a single graduate in the last two years who landed one of those six figure gigs.
Do you?

If that 40% is true I doubt they'd fall into the stats for unemployment in the legal community since not in the legal community.

Plus if they never plan to practice law, why go to law school? Are we talking about politicans I assume? For them, wouldn't a lack of legal employment not even matter since nonapplicable to their situation?

What it means is that the unemployment rate only applies to roughly 60% of all graduating JD's.  It means the unemployment numbers are skewed.  Why go to law school?  Well, I've asked a lot of people about that and gotten some very strange (to me) answers.  Here is a random sampling:
- The job market sucked when I graduated so I decided to fill that time with law school
- I couldn't get into law school
- My parents wanted me to go so badly
- I want to work for a not-for-profit and the people who do the job I want all have JD's
- I didn't know what else to do but wanted a higher degree than my bachelors
- I don't know.  I took the LSAT and did well so I figured I'd give it a go

I am not making any of those up, nor am I exaggerating.
Some people go to law school because they hope that their JD will suffice for an MBA and they aren't very good at math.  Some people go to law school just to get the degree (I have a friend who has a PHD and decided to go to law school.  She's in her last year and met a doctor.  They are engaged. She doesn't want to practice.  If anything, she wants to teach.
Some people get their degree, pass the bar, can't find work, and do something that isn't related to law.  I have a friend who's dad owns one of those pool/deck/game room supply type of companies that is fairly large and very profitable. She went to school because she didn't want to go work for her dad.  Now, however, with job prospects as thin as they are, she's admitted to me that she is considering going to work for her dad after law school if she can't find a job that pays her more than $60k a year.
There are a lot of reasons for the 40%.  However, it should be noted that not all of them go to law school just for another degree.  Many want to be lawyers, then when they hit the real world, they find that they either can't find steady work, can't find work with a decent wage, can't find work, or another opportunity comes along. 
Another anecdotal story - I met a girl who admitted to me that she is going to law school, and I SWEAR I am not making this up, so she could meet a husband.  Here I thought that crap ended in college!
I have another buddy who hasn't been able to find anything but contract work, and only once in a while, since graduating two years ago.  He went to a very good school, did well, interned at a mid sized firm (who didn't offer him employment because they were laying people off) and clerked for a judge before graduating.  He gave up and bought a carpet cleaning business with loans from his family.  He isn't reported as an "unemployed" lawyer.  He wasn't "unemployed" when he was doing contract work.  He isn't unemployed now.  He's just not working as a lawyer.
Point is, don't believe unemployment data.  First of all, it doesn't cover all the graduating students.  Second of all, it doesn't include those who have "given up".  And finally, it's just data.  Reality is reality.  If you attend law school and aren't in your final year, make friends with someone who is and keep in touch with them after law school.  They can probably give you a better picture of what employment prospects exist in your area than I can. 
What I know is that in Chicago, jobs are thin.  The Cook County States Attorney's office is on a hiring freeze.  The P.D.'s office isn't hiring that many people either.  There were a few thousand experienced attorney's laid off over the last few years and they are competing for the same jobs that recent graduates are. 

One more note - while the unemployment data sounds good, there are some things to keep in mind:
1) roughly 40% of law school graduates never practice law, so they aren't included
2) Solo practitioners (recent graduates who have no firm and little experience, so they handle little easy stuff) are counted as "employed"
3) The unemployment numbers aren't from licensed practitioners, but rather come from corporate responders

To respond to LincolnLover: to some employers, a JD has similar weight to an MBA.  I know a few people with JD's who got jobs as VP's of this or the other.  The caveat?  They worked for the company in a good job while going to law school and the degree likely simply gave them a leg up.

Go only as far in depth as is necessary.  For example, a diagnosis of insomnia should be included.  Your roommates loud snoring should not.
There is a difference between providing explanations and making excuses.  A loudly snoring roommate is an excuse.  A diagnosis of insomnia is an explanation.
If it were me, I'd tell the story by spinning it as positively as possible.
1.  Academic warning
2.  Sought medical help and was diagnosed with insomnia and given a prescription
3.  grades improved through hard work and laser-like focus
End of story.
The C&F element to the bar, as I understand it, is less about what mistakes you've made and more about being upfront and honest about them.  I think people spend far too much time worrying about explaining why things happen instead of simply saying what happened, what you did to rectify the situation, and what the result has been.
I have a buddy who was popped for misdemeanor possession of marijuana while in college.  He was upfront about it and didn't make excuses, saying it was a lapse in judgment borne out of immaturity that he learned from.  He not only got into law school (and did well), but is now a practicing attorney.  Academic warning, in my opinion, does not rise to the same level as misdemeanor possession of a narcotic.
Plus, you can amend your C&F answers while in law school, usually with the help of a faculty member....
Good luck!

It WOULD be wonderful if law schools gave an accurate picture of employment and salary data of graduates, but there are other factors besides the EVIL law schools trying to sell students on attending.  Many students simply don't respond to questionnaires sent to them by their law schools.  Some don't respond because they are embarrassed, some don't respond because they are too busy looking for a job, some don't respond because they are too busy working, and some don't respond because they were so sick of law school that they no longer want to "help" the school gather data.
Added to that, law schools don't want to get the most accurate data because it would reduce their application numbers.  Pre-law students don't really want the numbers because they prefer to live in a dream world filled with cute puppies and fields of daisies.  Ever try to talk to someone who is considering law school about the reality of law school?  If you are too honest, they look like they are either about to cry or they think you are a moron.  The truth hurts and, contrary to popular opinion, most people aren't interested in the truth.  They want the truth that they believe to be true.
For me, I ignored the toilet I attend's staggering reputation for flunking out students.  My school fails out more students every year than every other law school in the state (there are 9 schools, including mine).  Combined.  By a shocking amount.  If I had paid attention to that fact, I never NEVER would have gone to school here.  I would have waited for the next cycle and gone to a school more interested in pumping out quality lawyers than maxing out their admissions and flunking out 10% of every incoming class.  The data was there.  I even looked at it.  But I chose to ignore it because I wanted to go to law school asap and they offered me admission.
I just had a conversation with my cousin.  He graduated with a high GPA from Michigan with a degree in business.  He moved to NYC and started working for someone else and hates it.  His parents, both successful doctors, have been trying to talk him into medical school, but he isn't interested.  So they decided to try and push him into law school.  I spoke to him about how hard it is to get in, how hard it is to do well, and how hard it is to get a job.  His parents (my aunt and uncle) were furious.  I had to explain to them that it's his life and his choice.  I told them that they wouldn't like it if he went for a year and decided he hated it.  I told them that they wouldn't like it if anyone tried to talk them into going to medical school if it meant that 33-50% of medical school graduates wouldn't be able to find jobs or pay their debt.  I tried to explain to them that I wasn't going to lie to my cousin and paint a rosy picture of law school because that wouldn't help him.  I offered to have him accompany me to classes whenever he wanted.  That was 3 months ago.  My phone hasn't rung.  He wants to start a small business and thinks he'd have a better shot of making it than if he suffered through 3 years of school he probably wont like, then look for a job he probably wont like, then hate his career until he either quit to do something else or retired.
He's on the right track.  Too many kids graduate college thinking they are owed a high paying job, only to find out that their degree and complete lack of work experience only qualifies them for jobs that don't pay well and are very demanding.  It's entitlement.  Too many decide to go to law school because they think it entitles them to a six figure job, when it doesn't.  Even those who do get the golden job paying huge money find out it isn't glamorous, they usually don't have time to enjoy the money, and they don't see the inside of a courtroom for 5 or so years (assuming that's what they want).  What the legal community needs is more honest lawyers and law students forcing potential law students to understand just what they are getting into- the hard work, heavy load, being surrounded by a high concentration of the people they hated in college, ridiculous competition amongst peers, the lack of good jobs, and the massive debt.
My point is - the numbers law schools report shouldn't matter all that much.  What potential students should do is talk to 2L's, 3L's, recent graduates, and experienced attorneys.  They should attend a few law school classes as guests.  They should buy a first year Con Law or Property book and read it.  They should take a sample law school exam.  Most of all, they should be required to work in the real world for at least 2 or 3 years to see what that's like as well (I believe too many law students have zero life experience, making them arrogant, ignorant, and too self-assured).
I think they should also understand the trends in legal education, specifically the fact that for at least two decades there have been more students in law school than lawyers practicing.  That's all they really need to know....  The rest, the lawsuits, the blogs, the employment data, etc, is just BS.