As an initial matter, most 1Ls waste a huge amount of time getting their intellectual bearings; which would likely not be the case, assuming you have read “Law School Labyrinth- A Guide to Making the Most of Your Legal Education”. One other caveat: before you commit to employment, check with your law school to see whether they have a policy or prohibition regarding employment your first year.
That said, assuming that your ultimate goal is to work in a law firm, then grades are a fairly serious matter (I make this assumption because the vast majority of new law graduates aspire to law firm jobs). Law firms look at first year grades and not much else, in deciding who gets those precious clerkships that second summer of law school. Everything rides on that final exam and the difference between an "A" and a "B" is often practically impossible to discern. This is why I emphasize hitting the ground running that first year in “Law School Labyrinth”. It's also why I try and arm the reader with a proven methodology to help them learn the law and legal reasoning, in the chaos that is the first year of law school.
On the other hand, if you don't plan to work in a firm, grades simply aren't as important (although, as a matter of pride, they may be extremely important to you anyway). Either way, I wouldn't worry too much about failing (the "look to your left; look to your right; one of you won't be here next semester" is largely law school mythology). But the bottom line is pretty much what you would expect: all things being equal, working means you will have less time for studies, which could have a negative effect on your grades.
The hardest part of that first year of law school is simply figuring out the game. You are left to your own devices to figure it out. And the sooner you do, the more likely that you will do well. "Figuring it out" means learning legal reasoning ("thinking like a lawyer"), which is largely about analytical and syllogistic reasoning; learning the black letter law; learning to identify legal issues presented by a chaotic law school exam fact patter; and being able to apply the law to those facts in an analytical way, thus resolving the issue(s) presented.
If you don’t waste a lot of time pointlessly reading cases to no apparent end, writing huge outlines without really learning anything, and generally spending a lot of time on little or no return study activities, then it is likely you can work a reasonable amount of hours in addition to your legal studies.
One other issue. I absolutely loved law school. I had worked my way through college and was determined to totally immersed myself in the law school process without working. I tried to take advantage of everything my tuition dollars were paying for. So, there is a part of me that hates to see you work because I suppose I am imposing my own biases on you. But everyone is different. And based upon your career goals and financial constraints, "immersing yourself" in law school may not be that big of a deal. You may merely want to get through it and get your JD. Which, after all, is the real point of law school.
Regardless, assuming you have broken the Labyrinth "code" (and if you are reading my book, I think this is a reasonable assumption), the time investment actually required in your legal studies will likely not be as big of a burden as you might think. If you have a job during that first year in addition to your legal studies, you will certainly have a busy year, but if you focus on the right study activities (as described in my book), it will be doable.