There are three main reasons you would want to summer at a firm during 1L:
- You're genuinely interested in working at that firm after you graduate and want to secure it as an option.
- You're risk averse and want to go into EIP with a possible offer.
- You want the money.
The first two are pretty straightforward. The main counterpoint to those is that you could try government or public interest work for a summer to see what it's like. Working at a firm during 1L doesn't really give you an advantage in the EIP hiring process because some firms will be wary that they would spend a bunch of money training and wooing you in their 2L summer program only to have you decide to go back to your 1L firm. (Usually this plays out in reverse though, because you will probably get better firm offers 2L than 1L.)
The money point is different depending on who you are. If you do not receive financial assistance from the school then absolutely it makes sense. However, if you have an annual grant that is greater than the take-home pay of the firm, you'll find that working at a law firm 1L summer may be a financial wash.
In fact, when combined with SPIF and the way taxes and the financial aid formulas break out, it's actually possible to lose money by going to a law firm rather than working in a PI/gov position. And not small amounts either. I know of at least one person who, when they broke out all their financial aid changes, taxes, SPIF distinction, and added the summer firm pay, found that they had about $11,000 less coming out of 2L summer than 1L summer because they worked PI the first summer and at a firm the second. The financial aid reduction was more than the law firm's gross pay, so after taxes ($6.5k in this case, since financial aid isn't taxed but firm pay is) and removing SPIF ($4.6k) they got screwed.
In that specific case there may have been some other family change that affected the financial aid reduction (because I don't think it's supposed to be so much), but it is true that it's supposed to be a financial wash when deciding between PI and private work for your 1L summer if you are a grant recipient. If you're not a grant recipient, go work at a firm.