In what sense was the Law fleshly and carnal even though it was spiritual?
The Law was spiritual as God's perfect Law, but it was fleshly and carnal in its setting, usage, and practice because it depended entirely on the activities of the people under it. It was linked to Hagar, Mount Sinai, and earthly Jerusalem, which was in bondage with her children.
Les explains that the allegory uses Ishmael, born of the slave girl, to picture the Law given to Israel through Moses as fleshly and carnal. Yet he cautions that the Law itself was spiritual and God's perfect Law. Its fleshly character was in its setting, usage, and practice: it was all dependent upon the activities of the people under that Law. Hagar represents Mount Sinai in Arabia and answers to the Jerusalem that then was, still in bondage with her children. When Paul wrote Galatians around A.D. 58, the Temple was still operating, Israel was still under the Law, and sacrifices were being offered by the thousands. By contrast, the Jerusalem above is heavenly, free, and the mother of us all, referring to Sarah, the free woman who had the child by promise, standing in contrast to the Law given at Sinai.