This is an excellent question and one that troubles many people. I will try to answer it adequately. Throughout the book of Galatians, Paul is dealing with a heresy that has taken the churches of Galatia by storm. In chapter one, he mourns that that they have left the true gospel for "another gospel; Which is not another" (Galatians 1:6-7). It is another gospel because it has left the concept of salvation by grace alone. Now man must do some works too. It is "not another" because it still speaks of the death, burial, and resurrection of Jesus Christ. It has perverted the gospel by adding to the requirements of the gospel.
In chapter three, Paul asked the Galatians, "Are ye so foolish? having begun in the Spirit, are ye now made perfect by the flesh?" (Galatians 3:3). They trusted in the Lord by faith in Christ and received the spiritual new birth. Now they are trying to complete their salvation by works like circumcision (see Galatians 5:1-3). We know that there were Jews that were teaching that such works were necessary for salvation in the early church. Consider these verses from the time of the council held in Jerusalem.
- Acts 15:1 And certain men which came down from Judaea taught the brethren, and said, Except ye be circumcised after the manner of Moses, ye cannot be saved.
- Acts 15:5 But there rose up certain of the sect of the Pharisees which believed, saying, That it was needful to circumcise them, and to command them to keep the law of Moses.
Some of these false teachers had come to Galatia and had gained many converts. This is what Paul is dealing with in the book of Galatia. Now, let us look at the verse in question again:
Galatians 5:4 Christ is become of no effect unto you, whosoever of you are justified by the law; ye are fallen from grace.
Paul is saying that if anyone is trying to be justified (saved) by obeying the law, then they have fallen from the concept of salvation by the grace of God. No one can be saved by Christ and by circumcision at the same time. To add anything to the gospel makes it another gospel. Christ is become of no effect to anyone who trusts in Christ and circumcision. Or, we might say, Christ and baptism. Or Christ and confirmation; Christ and church membership; Christ and keeping the Ten Commandments. Anything added to Jesus Christ means that we are not fully trusting in Him and shows that we are fallen from grace.
To fall from the concept of grace means that someone leaves the concept of salvation by grace alone. It keeps people from getting saved. Those who supposedly trusted in Christ but then added the works of the law were either not saved in the first place or they will be corrected by God until they get it right. To fall from grace is to leave the concept of salvation by grace alone; it is not referring to the loss of salvation itself.