Luther and many teachers today have been wrong to pit Law against Gospel. Salvation is by grace alone through faith alone through Christ alone, but God's law is gracious and his Gospel is obligatory.
Possibly one of the best books I've yet read this year. (Bonus points for being awesome and succinct at the same time.) Sandlin takes the recent Law/Gospel dividers to task for Lutheranizing the Reformed faith, demonstrating that Scripture and Reformed theology has little to do with such artificial contrasts. Really, really enjoyable read, and just about 70 pages. Get it.
Wrongly Dividing the Word: Overcoming the Law-Gospel Distinction by Dr. P. Andrew Sandlin, is an absolutely phenomenal and short read. He rightly addresses the common modern-day evangelical thought that wishes to divide the Bible neatly into a ‘Law-Gospel’ paradigm. Sandlin succinctly dismantles such a view by providing an alternative to reading the Bible: as one united story that does not dichotomize Law and Gospel. There is law in gospel and gospel in law, Jesus Christ is the same yesterday, today, and forever. He is not schizophrenic about the covenantal message He gave to us found in His Word. I commend this booklet!
This book is biased towards a particular view and, while articulating that view relatively clearly, fails to consider, in particular, the whole letter of Galatians which explicitly states that Christians are longer under the Mosaic Law. It unnecessarily complicates the whole issue by presenting two extreme views from which to choose. But the best position (and most biblical one in my opinion) can be summed up by the following answers to two questions:
1) How is one saved? A: by grace alone through faith alone without works. 2) How should one live after one is saved? A: by living according to the "law of Christ" - to love others as Christ has loved us empowered to do so by the Holy Spirit.
That's the sum of the matter for new covenant Christians.