I don't think it is so much the fact that employers wouldn't hire you, it is the fact that you will not get much, if any, help from your career services office. Plus, the local market demand might be met by local law schools.
In fact, my opinion is that schools are not really regional, students are regional. People hear things about schools placing only in the northeast, they want to wind up in the northeast, etc., therefore they choose a law school in the northeast. Sure, some schools have "national reputations". I don't think that is so important. Surely it is not excluded to the top 15 schools as I have heard on this board.
Choose the school that you like. You can definitely get a job in New York (of all places).