“Should I apply to law school based on the city in which I want to practice?”

Here, also, it depends. If you attend one of the “elite law schools,” you should be able to go basically anywhere in the country. But if you are not attending one of the “elite law schools,” this means that your school will have a good reputation locally or perhaps even regionally, but no further. In such cases, your job prospects will invariably be confined to the general locale. For example, you can go to Harvard Law School even if you don't want to settle in the Boston area; a Harvard J.D. (that stands for Juris Doctor, by the way) will enable you to land a job anywhere. But you should not go to Suffolk Law School unless you are willing to live in Boston after you graduate. (FYI, if you do want to live in Boston, Suffolk is a fine place to get your J.D.; Suffolk grads can easily get jobs in private firms, the District Attorney's office, etc.)

What this ultimately means is that you will have to realistically assess your credentials DURING the application process. If you have a stellar GPA and an LSAT score in the mid-170's, you can go anywhere for law school and for law practice. But if you have a so-so GPA and LSAT score, you MUST tailor your applications according to where you might want to eventually live. Don't waste your application fee on a second-tier law school in a city you know you would not consider living in full-time (and of course, you should absolutely not matriculate at a law school in a city you wouldn't want to call home).

A related question … Is it better to place in the top of your class at a second-tier law school, or to place in the middle of your class in a top-tier law school? Yet again, it depends on whether you want to live and work in the same place you get your J.D. According to a mid-1990's graduate of an elite law school who has worked in private law firms and in government, “10th in your class at University of Baltimore law school will get you a great job in Baltimore, but not in New York or Washington.” If the second-tier law school is in a city you are happy with, you will have no problem finding a job in that city if you do well in law school. But you will have many problems finding a job outside of that city, even if you do well in law school.