This is a good question. This is the way I see it: If you are talking about something possessive, say "my mother-in-law's dress" If you are talking about more than one mother-in-law, say "All mothers-in-law" have a hard time with their daughters-in-law". After all, it's the mothers and daughters that are plural, not "laws".

Law's

mother-in-law's This car is my mother-in-law's Plural: mothers-in-law Plural possessive: mothers-in-law's "The mothers-in-law's convention will be in Miami"

Say my mother-in-law's thing. Contrast this with the plural form, which would be "mothers-in-law".