They look at your undergrad school and gpa, your law school, your work experience. "Soft" factors play a large role. Some people like giving interviews to the best local school, or to their alma mater. This gets you in the door. I think the most important thing as a 1L is the interview.
And 1L grades to matter a lot; most firms will interview 1Ls, but then wait to see their grades before they extend an offer.
People get this order wrong, and think grades come first, then interviews, etc. With big firms, however, by the time grades come out, all the other 1Ls who have interviewed already, and sent grades in last will already be receiving the spots available.