Continue to MBA without work experience?

I myself six, seven years ago was interested in going to law school, but I wasn't 100% in for it. Therefore, I chose to work in law firms to see how lawyers did their work, etc. After working several years, the one part about the job I liked as a former paralegal is researching, and digging deep into various subjects, while putting your knowledge in briefs, and other legal reports you write back. In fact, paralegals do quite a bit more legal work than what many think, but in the end, I saw a lot of unhappy lawyers, and with a dwindling marketplace (I have friends who are lawyers and had to experience that), I decided to take my research skills to a tech company where I am now and I couldn't be happier.

If you're going to law school just because of the employment prospects and for that 160K/yr job at a BigLaw firm in New York, I don't think you should be going to law school to begin with. If you're expecting that lawyers will be like the guys you see on Law and Order, JAG, and Franklin & Bash, you'll be disappointed. Few lawyers see a courtroom often, and BigLaw associates are essentially at their desks as long as investment bankers so if you don't like investment banking because of the hours, you'll hate BigLaw. You should want to be a lawyer because you like interpreting complicated statutes for firm clients and working within them, if I had to put this into one sentence.

Unlike law school, where most students are within three or four years of college graduation, business school pretty much requires some full time work experience after your bachelor's degree as you noted. Some schools are accepting student without work experience, but I think you'll need at least two years of it. It doesn't matter where you work, but you gotta find good experience nonetheless.

As for the GMAT, because you got a 161 on the LSAT (general sentiment among people who I know who are in law school now is that the LSAT has gotten a bit harder over the last five years which may contribute in part to your score discrepancy), you already have a head start on the verbal section. You will see logical reasoning (GMAT it's critical reasoning) and reading comp on the test. The critical reasoning questions and the passages are shorter and on average simpler than what you saw on the LSAT. You still need to brush up on grammar (GMAT sentence corrections) and the math which is algebra, geometry and arithmetic. Business school wants people who have a solid quantitative grasp, though not everyone is a math wiz either. The GMAT is good for five years from the date of your test, so you can take this later this year and apply a couple years later.

Good luck.