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Does staffing really matter for juniors (especially first years)? If so, how is it done?

What you're staffed on as a junior does matter to the extent that your early experience can often shape your trajectory at the firm.

Staffing policies will depend entirely not just on the firm but also on the specific practice group and its staffing policies.

Some firms/practice groups are entirely "free market" where senior lawyers staff junior lawyers directly just by reaching out to them (or junior lawyers reach out to senior lawyers to solicit work) while other firms/practice groups prefer to coordinate all new staffing through a centralized staffing partner or administrative coordinator (which are still influenced by the case/deal team senior lawyers' preferences for which juniors they are willing, not willing or indifferent to working with).

So, does this even matter as a first year? And if the first year stops getting a lot of work, is that a cause of concern?

If a first year stops getting work it can mean a lot of things, all depending on the firm. It could mean that nobody wants to work with you, which is bad. Or it could mean that things are just slow right now overall, or slow in your practice group, but will pick up later. That’s fine. Or it could mean that things are slow, and they’re SO slow that the firm is losing money and may eventually lay people off if they’re over staffed. That’s bad. Probably other explanations too.

The only people who would really know the answer are the coordinators (if you have them) and the partners who are staffing you or not.