This is the credited response.
Yes, the job market is not great, but that's for everything. You are probably much better off staying for the next 2 years and doing the best that you can than dropping out now and have to worry about finding a job, etc. I was in a similar situation after my first semester of law school (except at a lower tier 1 school), but I decided to stay.
Lots of legal jobs (and those related to law) don't ask for transcripts, especially once you graduate and pass the bar. Don't offer it unless they ask for it--its not being deceitful, its being stragetic. They have a strategy, why shouldn't you? But you can't expect to make 6 figures right off the bat either. You might have to be creative in your job search--try some paralegal positions, teach at a technical school/ community college, do temporary agency work, work at a smaller firm, or even for a nonprofit to get some experience.
I would advise you not to make the decision about dropping out until you totally finish the first year. It could get a lot better. If you do stick it out, use second and third year to make some meaningful contacts, get some part time jobs (paid or unpaid) so that people can get to know you--great references are always good to have, and depending on who you know, can make a world of difference.
Also, in terms of paying back loans with a low salary, there are some programs in some states that assist with loan repayment while you work in government or with a nonprofit. You should check those out as well.
Its not the end of the world, it just requires a change in perspective. And, if you really want to work for a firm, get to know some people and you may be able to lateral in after practicing for 2-5 years.
Good luck!
$40k debt isn't bad. Lots of people graduate undergrad with that kind of debt. If you lost your scholarship though...you may want to seriously reconsider law school. Paying full price for a T3 would be rough.
At the very bottom of a T3 I'd still say the options are broader than roy is making them out to be. Assuming you're in a small or midsize market where your school is respected, and if you're not shy about getting your name out there, I'm sure you could get an associate position and eventually rise through the ranks of a respectable local firm.
Government work, on the other hand, might require more than a JD and a pulse, depending on local supply and demand.
Don't lose hope. It's only the first semester. Figure out what happened and do it better next time.