What to do with class notes is an eternal question. The usual advice is “do what works for you.” The usual doesn’t-help advice.
Avoid dictation notes. Don’t try to type down everything that is said in class. You want to pay as much attention to the discussion as possible. If you wanted to be a court stenographer, why are you spending money on a law degree?
Try to just note the basic rules as discussed in class. Do not bother with typing in facts of the cases (they can always be retrieved from the book). However, a few words about the case to jog memory can be useful. (For example: “the case of the hairy hand.”)
Hypotheticals: I usually try to write down the hypotheticals that the professors use and just abbreviate the facts as much as possible. Usually the professor will just say, “What if in case _____, the defendant had done ____ instead?” Than you just note “Case ____ but D did ____” Then you can reference the book (or your reading notes or your briefs) for the facts.
My reason for keeping the hypos is to have examples of rule application. That can be useful later when you are trying to figure out the nuances of a rule. If you miss a couple, don’t worry about it.
Review your Notes. After class, spend some time thinking about the class discussion. This will help reinforce it in your mind. Go back over your notes and fill in details and longer explanations. If you write out notes based on your reading, this would be a good time to cross reference the two.
I personally do not agree with Law School Confidential where they say to take your class notes and, every day, work them into your outline. I think that you need to be done with a particular section before you can organize it in outline form. (You need to see the forest for the trees.) Oftentimes you don’t even understand the organization of that part of the course for quite a while. However, if doing this every day ensures that you will do the outlining, by all means do it. At a later point in time, you might want to rethink the overall structure of your outline.
Recording class discussions: I do not do this due to my night student time limitations. (If I were smart, I’d record and then listen while driving into school.) If the sound quality is good, I’m sure it would be helpful for getting that stuff that you missed in your class notes. Just be aware: different states have different rules about the legality of such recordings. I’m sure most professors don’t care but check to see if it is okay.