I don't know much about either school but I am familiar with the Lexington area and there is not much there. Some people may take offense by your "much lower quality of life" statement but what I took from that is that you are used to LA and NYC and you would be unhappy or at least you think your quality of life would be lower if you were stuck in a small town. Also, I'm not sure about W&L placement but I would check to see if many grads go to LA or NYC, they probably stay in the northern VA/ DC area. One of the most important things in choosing a law school is choosing where you think you'd want to practice and if VA is not on that list then I'd pick USC. I've also heard that it is easier to transfer from one big city to another such as LA to NYC rather than from a smaller city to a bigger city. Something like: you can always move down or laterally but it's hard to move up, not from law school but from practice.
I wasn't offered any money when I started law school last year so I can't imagine what you're struggling with but if you would really be unhappy you should go to USC. Just like some people say that rankings and potential salaries should not affect your school choice, potential debt shouldn't either, particularly based on your posted choice of practice. With a job in LA or NYC you probably won't have a problem paying off that debt.
You never know, you might like a small town but if you just can't stand the idea of mountains and sheep, skip VA and stay in CA.
This is my humble opinion so please don't base your decision on my post, just something to think about. Hopefully someone from USC or W&L will chime in and be more helpful.
Jen
(Disclaimer: I grew up in VA, I like VA and I am thinking of moving back to VA but it didn't sound like mcgrohan would be very happy in Lexington. If you're from W&L and you disagree, chime in and lure mcgrohan to VA.)