The Believer and the Law 

Two key facts must be kept in mind. First, the believer is not under the law (Rom. 6:14). In fact the believer has died to the law that he might live unto God (Gal. 2:19; and see Rom. 7:1-6). He is not under the legal rule, but he is under the new creature rule (Gal. 6:15).  

Second, the believer is not lawless (Rom. 6:1-2). We died to the law so that we might be married to Christ and out of this relationship we bring forth fruit unto God (Rom. 7:4). The life of a true believer should manifest fruitfulness not lawlessness.  

Those legalists who try to put themselves under the law do not keep the law (Gal. 6:13; Acts 15:10), but those believers who walk in the Spirit keep the law by way of the fruit of the Spirit: "That the righteousness of the law might be fulfilled in us, who walk not after the flesh, but after the Spirit" (Romans 8:4 and compare Galatians 5:22-23). 

LEGALISM - WHAT IT IS NOT 

Being obedient to God's specific commands is not legalism. "And hereby we do know that we know Him, if we keep His commandments. He that saith, I know Him, and keepeth not his commandments, is a liar, and the truth is not in him" (1 John 2:3-4). 

Living a holy life that is set apart unto the Lord's service is not legalism. "For this is the will of God, even your sanctification [holiness], that ye should abstain from fornication....For God hath not called us unto uncleanness, but unto holiness" (1 Thessalonians 4:3,7). 

Living a life separated unto Christ and separated from the fads and fashions of the world is not legalism. "And be not conformed to this world: but be ye transformed by the renewing of your mind, that ye may prove what is that good, and acceptable, and perfect, will of God" (Romans 12:2). 

Conforming one's life to be in harmony with certain standards decided upon by Spirit-led leaders of a local assembly of believers is not legalism. "That ye abstain from meats offered to idols, and from blood, and from things strangled, and from fornication: from which if ye keep yourselves, ye shall do well. Fare ye well" (Acts 15:29). 

Forgoing my personal rights for the sake of my brother is not legalism. "It is good neither to eat flesh, nor to drink wine, nor any thing whereby thy brother stumbleth, or is offended, or is made weak" (Rom. 14:21). 

In true separation Biblical principles are understood and external standards are implemented. In legalism Biblical principles are ignored and external standards are exalted. In libertinism Biblical principles are forgotten and external standards are despised. The third description seems to be where the vast majority of the church is moving today.

The above is a paraphrase of a statement made by Douglas R. McLachlan in the book, "Reclaiming Authentic Fundamentalism", American Association of Christian Schools, 1993, page 114.