Traditional law school exams certainly don't encompass all the skills of being a good lawyer--nor could they. It would be very difficult to design an exam to test the maturity, common sense, and wisdom of a good divorce lawyer, who helps the client get through a major life change without unnecessary additional trauma.

But law school exams are very good at testing most of the subset of lawyering skills which law schools teach well--including the ability to think quickly. Yes, three hours is a short time to analyze three or four major problems, and spot the key issues,and the important secondary issues, in every single problem. However, much real-life lawyering is done under intense time pressure. You have to think quickly when you're a rookie defense attorney speaking for your client before the court. Or when you're a young corporate associate having to draft an emergency brief in 12 hours. Or when you're a citizen-activist/advocate (as so many lawyers are) speaking for your cause on talk radio or in a local TV news interview.

There are many lawyerly skills (such as writing law review articles, or appellate briefs when not under time pressure) for which quick analysis is not necessary. Students can get recognized for such skills in research classes. For almost any young lawyer, and therefore for almost any employer of young lawyers, the quick-thinking abilities which law school exams accurately (usually) rank are very important skills.