There are some who believe that the late R. J. Rushdoony, one of the modern theonomic reformation's most influential voices along with Greg L. Bahnsen, was a legalist because of statements he's made about sanctification.
Greg Loren Durand, for instance, accuses Rushdoony of "blatant legalism." However, in "The Modified Dispensationalism of Greg Loren Durand Exposed," Brian Schwertley answers these allegations. He writes:
"Note the following quotation from Durand’s book, Judicial Warfare:
"According to Rushdoony, “Man’s justification is by the grace of God in Jesus Christ; man’s sanctification is by means of the law of God…. Sanctification depends on our law-keeping in mind, word, and deed. The perfection of the incarnate Word was manifested in His law-keeping; can the people of His kingdom pursue their calling to be perfect in any way other than by His law-word?”
"Thus, blatant legalism lies at the very heart of theonomic Postmillennalism and since it is clearly the subject of the Apostle’s condemnation in Galatians 3:2-3, this is one fact that the more moderate Reconstructionists are not too eager for the Church at large to discover (142)"Before we further analyze this statement theologically and demonstrate that Durand’s view is erroneous, we first need to clarify the quote from Rushdoony which (whether deliberate on Durand’s part or not) is somewhat misleading.
"The first part of the quote is from page 4 of Rushdoony’s book, The Institutes of Biblical Law. The second half of the quote, following the ellipsis, occurs on page 307.
"If Rushdoony were saying that we are justified solely by Christ, but that sanctification was something that men can do in their own power, without the work of the Holy Spirit who is given to us and works effectively in us because of the efficacy of the sinless life, death and resurrection of Jesus, then Durand would be making a good point.
NOTES:"But, as a former Christian Reconstructionist who tells us that he has carefully studied Rushdoony’s books, Durand should know that this is not what Rushdoony is teaching at all.
"Rushdoony repeatedly insists in his writings that there is no hope for people or society without regeneration or a work of the Holy Spirit.
"For example, he writes, “The New Testament abounds in warnings against disobedience and in summons to peace. The key is regeneration, propagation of the gospel, and the conversion of men and nations to God’s law-word. Meanwhile, the existing law-order must be respected, and neighboring law-orders must be respected as far as possible without offense to one’s own faith” (Institutes, 113-114).
"This quote completely disproves Durand’s assertion on page 143 which implies that Christian Reconstruction is all about exercising dominion over their fellow men. In The Institutes of the Biblical Law Rushdoony says, “The key to social renewal is individual regeneration. All authorities are to be obeyed, parents, husbands, masters, rulers, pastors, always subject to the prior obedience of God” (p. 122). On page 449 he adds, “Clearly, there is no hope for man except in regeneration.”
"On the same page where Rushdoony says that “sanctification is by means of the law of God” (p. 4), he goes on to clarify this statement by saying, “The purpose of grace is not to set aside the law, but to fulfill the law [i.e. the justification achieved by the active and passive obedience of Christ] and enable man to keep the law” (i.e. the work of the Holy Spirit in regeneration and progressive sanctification whereby the justified sinner is more and more enabled to obey the moral law out of gratitude for the salvation already achieved by Christ.)."Anyone familiar with Rushdoony’s writings, knows that he repeatedly insists on the necessity of regeneration, conversion and work of God’s Spirit in people, if they are to live in obedience to God’s Word. Rushdoony is not a legalist and never has been.
 “In terms of God’s law, true reform begins with regeneration and then the submission of the believer to the whole law-word of God” (Institutes, 571). Cited in Brian Schwertley, "The Modified Dispensationalism of Greg Loren Durand Exposed."