A wait list (or reserve list as some schools refer to it) is comprised of applicants who the admissions committee has determined are academically qualified to attend the school, but the admissions committee is not yet prepared to offer the applicants a spot in the incoming class for various reasons.
The manner in which law schools use wait lists varies significantly school-by-school and year-by-year. Some schools admit applicants off the wait list even before the deadline to apply has passed. Others wait until after the first seat deposit deadline (the deadline for admitted students to pay a fee to hold their seat in the incoming class) has passed to admit applicants from the wait list. In more competitive years, law schools may not admit anyone from the wait list. In the 2013 admissions cycle, however, law schools admitted a significant number of applicants from their wait lists.
In general, law schools tend not to rank or order the applicants on their wait lists. Even those schools that do rank wait list applicants tend to do so using general quartiles or broad categories of priority. It varies school-by-school as to whether the school will inform an applicant where he/she stands on the wait list.