The law/gospel distinction (or hermeneutic) is most naturally associated with Luther, but versions of it were taught by 16th century Reformed theologians as well. Here is Theodore Beza's definition from his treatise The Christian Faith published in 1558.
We call the Word of God the canonical books of the Old and the New Testament, and no other thing, whatever it may be. And we divide this Word into two minds or parts, of which the one is called the law and the other the gospel. For the rest depend on the one or other of these two parts. We call law what is distinct from the gospel, a certain doctrine whose seed is naturally written in our hearts, which nevertheless for a more express declaration was written of God and comprehended briefly in the Ten Commandments, by which He declares to us the obedience and perfect righteousness which we owe to His majesty and to our neighbor under a changeable condition, i.e., either of life eternal (so that we have perfectly fulfilled the whole law without breaking any one point, Deut. 30:15-20; James 2:10), or else death eternal for lack of the entire fulfilling and accomplishing the contents of every parcel of the commandments.
We call the gospel or evangel (i.e., good news) a certain doctrine revealed from heaven altogether surmounting the natural sense of man (Matt 16:17; John 1:13) by which word God declares to us that He will save us freely by His only Son, so that we embrace and accept Him by faith as our only wisdom, righteousness, sanctification, and redemption (1 Cor. 1:30); by which also, I say, He testifies to us of these things, yes, in such a way that He renews us by the same Word to embrace the goodness which is offered to us there (1 Cor. 2:4).
A century and a half later Scots Presbyterian Ralph Erskine set law and gospel to verse.
Does ever for perfection call;
The gospel suits my total want,
And all the law can seek does grant.
The law brings terror to molest,
The gospel gives the weary rest;
The one does flags of death display,
The other shows the living way.
The law says, Do, and life you'll win;
But grace says, Live, for all is done;
The former cannot ease my grief,
The latter yields me full relief.
The law excludes not boasting vain,
But rather feeds it to my bane;
But gospel grace allows no boasts,
Save in the King, the Lord of Hosts.
Like anything the law/gospel distinction can be abused—and there are nuances that have to be worked out—but I believe Luther & Co. were fundamentally correct that without it the teaching and understanding of Scripture very quickly gets off on the wrong track.
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