Smart people are able to look past the rankings system and choose the best institution for their needs. The ones who assume that USNWR rankings are dispositive with regard to which schools are best may get lucky, but theirs is neither the only approach nor the best.
The best law firms, by the way, have the benefit of seeing how new associates do over time. As a result, they usually have a very good idea which schools are turning out quality people. Do you seriously think that those firms bother to see which schools are moving up and down USNWR's ranking each year? I can assure you that the best firms couldn't care less what USNWR thinks.
No, I don't think firms care about schools moving up and down in the rankings. As you say, they care which schools are turning out quality people. As schools go up in the rankings, higher quality people decide to attend those schools, and higher quality people then come out of them. That's not because the quality of the education has improved (a thing that's incredibly difficult to determine), but because the students start out with a higher level of ability.
And whatever you think about smart people looking past the rankings to make their decision, it's simply not happening in the vast majority of cases. People might not always choose the higher ranked school when considering two that are closely ranked, but the rankings are a huge