The story opens in the country churchyard, where Pip is terrified by the appearance of an escaped convict (later revealed as Magwitch) who threatens him with awful vengeance unless he brings some food and file to him the following morning. Pip manages to hide some of his own supper, steals more food from the pantry and, after an encounter with a different, younger convict (Compeyson), finds the original one and leaves him filing off his irons.
As Pip is the narrator it enables him to recreate the past with a vivid sense of immediacy and to comment on it, often ironically, from the standpoint of a man who is older, wiser and sadder. Because Pip is narrating his story many years after the events of the novel take place, there are really two Pips in Great Expectations: Pip the narrator and Pip the character—the voice telling the story and the person acting it out. Dickens takes great care to distinguish the two Pips, imbuing the voice of Pip the narrator with perspective and maturity while also imparting how Pip the character feels about what is happening to him as it actually happens. This is perhaps best observed early in the book, when Pip the character is a child; here, Pip the narrator gently pokes fun at his younger self, but also enables us to see and feel the story through his eyes.
The setting of Pip’s meeting with Magwitch almost always symbolizes a theme in Great Expectations and always sets a tone that is perfectly matched to the novel's dramatic action. The misty marshes near Pip's childhood home in Kent, are used several times to symbolize danger and uncertainty. As a child, Pip brings Magwitch a file and food in these mists; later, he is kidnapped by Orlick and nearly murdered in them. Whenever Pip goes into the mists, something dangerous is likely to happen. Significantly, Pip must go through the mists when he travels to London shortly after receiving his fortune, alerting the reader that this apparently positive development in his life may have dangerous consequences. The setting of the misty marshes additionally sets an anxious, tense atmosphere leading up to the moment when Magwitch jumps up behind a frightened Pip.
Chapter 1 includes the famous encounter between the fearsome Abel Magwitch and young Pip. Many consider this chapter to be extremely important in relation to the plot of the book. Pip's kindness makes a deep impression on him, and he subsequently devotes himself to making a fortune and using it to elevate Pip into a higher social class. Behind the scenes, he becomes Pip's secret benefactor, funding Pip's education and wealthy lifestyle in London through the lawyer Jaggers. If the meeting in the graveyard did not occur Pip would not have travelled to London, reunite with Estella or Herbert Pocket, met the lawyer Jaggers or his clerk, Wemmick, or find that Estella’s father is no other than Magwitch, therefore not becoming a gentleman, something he had dreamed about long after he met the convict.
Pip’s kindness in bringing Magwitch he file and wittles made a vast impact on him. He realises it would have been easy for Pip to run to Joe or to the police for help rather than stealing the food and the file, but Pip honors his promise—and when he learns that the police are searching for him, he even worries for his safety. The reader sees how Magwitch is impacted by his kindness when, after caught, he ‘confesses’ to stealing from the blacksmith, to save Pip from punishment if Mrs Joe ever found out it was him that stole the food. If Pip had not brang food to him, Magwitch would have certainly starved to death, or die of another cause. He realises Pip had saved his life, and devoted the rest of his to raise enough money single-handily so Pip could travel to London to be a gentleman.
To prove how Pip’s actions had saved him, he travels back to London just to see him as a gentleman, risking his life since if he is caught, he would be sent to death as he was not allowed to return back to England.
After chapter 1, the reader has the impression that the convict is a heartless criminal because of the way he used and frightened Pip into getting him food and a file. Though, after Pip finds out that his benefactor is Magwitch the reader sees how kind he is, and how venerable he really is.
Though Dickens gives us no indication of Magwitch’s future in Pip's life, he does create the sense that the convict will return, largely by building a sense of mystery around the man's situation and around his relationship to the second convict Pip encounters in the marsh. Also he made another reference to the convict when Pip is with Joe and a man he was talking to produced a file out his jacket and stirred his drink. Additionally, the reader is given a slight clue his future benefactor when money is given to Pip by the man in the pub.
Basically, Pip’s meeting with Abel Magwitch is extremely important as it sets the scene for the entire novel and begins a chain of events that lead up to him becoming a well respected gentleman, and realising that there are more important things in life than wealth.