The so-called new perspective on Paul (NPP) is based on the assumption that Protestants have misunderstood Paul's teaching on justification. Scholars associated with this revisionist stance include E. P. Saunders, J. G. D. Dunn and N.T. Wright. All NPP proponents are usually named using their initials.
Reformers and Revisionists
The Reformers, in their simplicity used to think that 1st century Jews believed in salvation by works just like 16th century Roman Catholics. Saunders challenged that view by saying that "Second Temple" Jews believed that they were saved by God's gracious election. They may have taught that they had to "stay in" the covenant relationship by works, but they "got in" by grace.
When Paul wrote that we are saved by faith in Christ not by the works of thew law, he was not condemning legalism. He was saying that faith in Christ is that badge that now identifies us as the people of God, not the works of the law like circumcision under the old covenant. Justification by faith, then is about the question, "Who are the people of God?" The answer is, "Jews and Gentiles whom confess Jesus Christ as Lord." Jews who insisted that Gentiles get circumcised and obey the law to be "proper" Christians were being nationalistic rather than legalistic.
Can the NPP be justified?
The Reformers understood that justification is God's declaration that we a right with him on the basis of the obedience and sacrifice of Christ. For them, faith is not a "badge", but the empty hand that lays hold of the righteousness of Christ. In that case, justification is a legal category. It is the opposite of condemnation. It concerns our status before God rather than our identity within the people of God. Strangely, this is exactly what Paul says in Romans 8:33 & 34, "It is God who justifies who is he who condemns?" [Emphasis added]
Second Temple Jews may have believed that they "got in" by grace, but if they had to "stay in" by works, then this is still salvation by works. It seems that in terms of getting through the judgement of God into eternal bliss, many believed that they had to "get there" by their works. NPP scholars like N. T. Wright teach that final justification is on the basis of the whole life of faith, including works.
Paul's pespective on Paul
Paul's great argument in Romans 1-3 is that "by the works of the law no flesh shall be justified in his sight, for the works of the law were the badge of membership under the old covenant." Not really, the text says that we cannot be justified by the works of the law because "by the law is the knowledge of sin." (Romans 3:20). We have broken God's law. We are guilty before him (Romans 3:19). We cannot bring ourselves into a right relationship with God because we stand condemned as sinners. God justifies us on the basis on the atoning work of Christ (Romans 3:24 & 25). We are declared to be in the right with God because Christ has redeemed us. Justification is primarily about our standing before God, not our membership of his people. It is true that justified sinners are God's people, but justification by faith is not a "Jesus is Lord" badge. How could such a badge help us before the bar of God's judgement?