Law schools do not have head to head, score keeping competition so there is no way to actually relegate a top 20 law school to the next 20 in the rankings if it is at the bottom of the 20. In way, USN&WR does some of this - a school can fall into a lower tier as mine did a couple of years ago and then fight its way back. But relying on USN&WR as a guide for this is a bit like asking Chauncy the Gardener to take care of a nuclear reactor.
But suppose there were some why of ranking faculty productivity alone -- pages published, teaching evaluation by those 5 year out of law school. You can see where I am going. Most law professors are tenured but does this rule out relegation, at least in this imaginary world. They get hired largely on the bases of credentials and tenured unless they monumentally screw up. So there really is nothing to do with the ones who are disappointing, except send them down a notch. The problem is that is hard to determine what it means to be relegated to a lesser school when lesser is not defined. On way around this is to relegate to a school where the productivity per faculty member is less than that at the underachiever's school. You could get promoted to you old school or higher by then outperforming the people at the new school.
I know there are many problems here. But you cannot get rid of tenured people and most law school deans do not have the money or courage to administer financial punishment. Surely there are antitrust issues but are they really as bad as the ones the NCAA has overcome by its lame "amateurism" rationale?
Best of all, in a Darwinian sense, schools can get rid of their mistake and professors will end up with their true Peers. Some will be relegated to Community Colleges, High school and out of the profession completely.
Ok, I guess I am kidding but not 100%.