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T2 CA, top 25% after first semester, long term goal is 25-100 attorney firm, if biglaw isn't an option (I am assuming it will not be).

Is it unwise to spend my 1L summer with a small firm, say solo practitioner or 2-5 attorney firm? Even if this position is the only paid option?

Absolutely! Hopefully, this position will provide you with a lot of hands-on, practical experience (something that is generally very easy to sell). Although not a big name firm, I think that you'll have a lot to talk about should you have any interviews next fall.