I would say that it's immensely useful as a law student, but difficult to figure out how to use it. If you can successfully network, you'll be more likely to find a job and more likely to keep it. You'll be much more likely to hear about the job you want when and if it opens up and people who know you, even a little, will likely view you in a more favorable light than people they don't know. Not fair, not even rational... but reality.
What Wally says about law students is semi-correct: it's hard to network before you specialize and know which net to work. If you're lucky enough to already know your specialty (say, if you're in IP, for example), you'll likely find that it's relatively easy to identify key players. Figuring out how to contact them without harrassing them is a trick, talent and art. Yet, even large sub-fields of law like intellectual property are relatively smallish communities of professionals and ability to network is hugely important.