Luther is commonly accused of disparaging the Law. This comes from his famous distinction between Law and Gospel. This was, of course, borrowed from Augustine, who distinguished between what he called Law and grace.
In any case, the Law for both Luther and Augustine was not in itself negative. Rather, for the unspiritual man, it is, as Augustine says, “an obstacle in many ways unless grace assists. This shows, moreover, the function of the law: it makes people guilty of transgression and forces them to take refuge in grace in order to be liberated and helped to overcome evil desires. It commands…[but does not] liberate” (On the Grace of Christ). For the fleshly man, the law is a burden, a commander that cannot empower, and because of this, is condemns.
But what about the Law for the Spiritual man? Luther has a wonderful commentary on the first Psalm that illuminates his understanding of the Law. On the one hand, it is obvious that for Luther that the Law is, as he say, “wearisome”, for the ungodly man (LW, V 10, p 13). However, for the godly man, is a delight.
Commenting on verse 2 — “but his will is in the Law of the Lord” — Luther says this:
That is, not only does the hand do the law of the Lord, either compelled by necessity of fear of punishment or attracted by the hope of earthly gain, without any desire, but he does it with a cheerful and free will (p 13)
Luther distinguishes the the Spiritual man from the fleshly by maintaining that the this man does the law cheerfully. It is a delight to him. It is not something imposed, something fearful, in competition with his own will. Rather, he does it freely. He clarifies, “this does not apply to those who are under the Law in a spirit of bondage in fear, but to those who are in grace…thence Christians are called free, spontaneous and free” (13). Luther goes on to say that the Jews obeyed the Law “only with the hand”, that is, only externally. But it was wearisome for them. It was against their own willing, and thus God was in competition with them, imposing his will from the outside.
On the contrary, the spiritual man obeys willingly, spontaneously, and most importantly, from within. Luther says:
Therefore Thy law is not in the outer edges and skin of my heart, but in the inside, in the innermost and complete dedication. But with the Jews it scarcely grazed their heart gently because of fear (p 14)
The spiritual man delights in the law because it has made its own way inside. This is a picture of what happens in the New Covenant: the externalized law that imposed itself makes its way to the inside such that it is no longer an imposition but a desire, a delight. Luther finishes by saying this:
Christ does not want His rule to rest on force and violence, because then it would not stand firm, but he wants to be served willingly and with the heart and the affections… It is for this reason that he gave his Spirit… These are the ones whose delight is in the law of the Lord, since this is something that comes out of us apart from the Spirit of God (pp 14-15)