A couple points on how to select a "good" school (good is in quotes because it will depend on context)
1) Instructor's experience- what kind of experience and success does the instructor have in the aspect of combat that you seek to learn? Or, if they don't have any experience do they at least have experience/success training others in this aspect?
2) Rank- I know a lot of people will disagree with my bringing up rank, but someone who has achieved a very high rank (and/or been awarded it by a respected governing council/board) is usually going to have both a lot of experience and expertise. Not all systems give belts though, so it's just one thing to consider. Of course, if say it's something like wrestling, boxing, MT, MMA, etc... if the person was a champion that's sort of a type of rank IMO.
3) Instructor's teaching ability- just because you can do something well, doesn't mean that you can also teach it well. There is an art to teaching all in of itself, and it's tough to find people who can both do something at a very high level, and teach it at the same high level.
A good teacher should both know the art, and know people. They should be able to put things in ways that make it easy to understand. They should be able to give you verbal, visual and kinesthetic cues that will aid in your learning a new skill. They should understand different temperaments; how to work through or around mental emotional blocks to learning skills; how fast/slow, aggressive/passive, brutal/gentle to take things with each student.
Really, there is a lot to being a good teacher.
4) Instructor's contacts/networking- no one person holds all the answers. Yes, you'll find some that know a lot about a wide variety of areas, but in most cases they'll freely admit that there are still people who could teach them things about certain areas of combat. The good ones will also usually be in constant contact with such other good instructors.
Find out if and how often your school holds seminars with other highly skilled instructors (especially if those instructors specialize in the area which you wish to pursue, i.e. law enforcement).
5) School's primary focus- Some schools are primarily sport based, but teach self defense classes on the side. Others are primarily self defense based, but also teach MMA specific classes on the side. Some are all about forms and board breaking competitions (obviously not what you're looking for). Some are primarily law enforcement/military based, but teach civilian self defense on the side.
Generally what you want to look for is a school that focuses on the particular part of MA that you want, but at the same time doesn't completely ignore other useful parts.
For instance perhaps they focus on law enforcement/military training, but still train in the more shall we say "sporting" based arts (boxing, MT, wrestling, submission grappling) as all of those arts can be/are also very beneficial from a unarmed combat perspective. In other words, teach the directly functional skill sets, but not neglect or look down upon other perhaps less specific, but still beneficial skill sets.
6) Address not only physical, but also emotional and mental aspects of training- lots of schools pay a lot of attention to development of physical skills (and for good reason), but not all that many (at least from what I've seen) focus on the mental and emotional aspects of training, even though these aspects make up a great deal of the effectiveness of the art.
In other words, the teacher should put the students into situations that (as closely as possible, while still retaining enough saftey to make it through the training alive) resemble the situations that they are training to deal with. This should/could include:
- verbal conditioning drills where the students assume roles
- postural/verbal self defense drills
- situational self defense drills
- simulated combat scenarios (as Miss. Parker mentioned)
Systems that like to play it safe and where you don't actually get an adrenaline dump and/or actually experience fear in your training are simply not preparing you for real world self defense/law enforcement/military training scenarios. You cannot over rule the body's natural responses, so you've got to learn to function with them effectively.
7) Schools that actually test their material in as realistic ways as possible- This is something that MMA schools (or "sport" style schools in general) do very well at. Sure, their definitions of "realistic" might be different than a law enforcement/military definition as their context will be different. But, they still test their skills. You need to "spar" with your skills.
This doesn't mean that you have to put on the gloves, headgear, shin guards, or whatnot; get into the ring, touch gloves and kickbox each other. It just means that you need to practice your techniques with fully resisting opponents, people that aren't letting you do whatever you want to do to them, people that are actively thinking and trying to prevent you from doing what you want to do.
The more "realistic" (and in this case I mean real world) the situation that you're training for, the less restrictions should be placed on what either person can or cannot do.
That's all I can think of off the top of my head. Hope it helped some and good luck.