I think they value grades more than r6 insinuated, but I will agree that grades might not even be the most important factor in getting a paid 1L summer position (whereas it is the most important thing for your 2L summer position).
Grades is more important when you don't have the other attributes. It's a combination of all things. If you have a EE PhD and 10 years working for intel you are going to get a 1L job with straight Bs. The fact that many people get firm offers before 1L grades are even released shows you how much grades matter for 1L hiring. And again, one semester of bad grades isn't going to overwrite all the other stuff one has going previous to law school, especially considering everyone knows it's a big adjustment and grading is arbitrary. The competition for 1L firm hiring is different than 2L hiring IMO, employers are looking for different things.
I was shocked as to how doable getting a paid 1L summer job is at Penn. That said, the number is still REALLY low. Don't bank on it. I used to think they were like mythical unicorns and didn't exist, but now I see they're just kinda rare.
What's "really low"? It was like 10-15% in the ITE years, I wouldn't be surprised if that number is higher this year. I am curious what the number break down really is come Nov. 1. I know quite a few people at firms, and I only know about half of the students.