@stephli, here should be your answer:
http://www.lsac.org/aboutlsac/policies/transcript-summarization
Pass/fail grades DO appear on LSAC report. See the bottom of the page available through the link, under “Unconverted Credits”.
If there are 2 candidates, one with a 3.9 in 40 graded classes, and one with a 3.9 in 20 graded classes, and 20 pass/fails showing up on the LSAC report, which one will law schools accept if a choice is required? The first, not the second.