This is a complex area, Jewish and Christian hermeneutics. I think B.S. Childs had the best insights, but his views are hard to understand and not particularly systematically worked out in one place (they presume a knowledge of other works, such as Barth and Hägglund, which I'm still trying to get through). His point is that regardless of the hermeneutic we use to interpret the Bible, it is always undergirded by a specific theology. Christianity inherited the Old Testament as Holy Scripture, just like the Jews, but how it functioned within the community was different. This is seen in the fact that for Jews midrash was the primary mode for appropriating Scripture, whereas for Christians it was allegory. For the Jews, with their focus on Torah as the centre of Scripture, there was a strong emphasis on making the various parts fit into an interconnected whole which could then be put into practice. The boundaries of the canon, the order of the books, the language of the text, where all firmly fixed so that the text could be "applied" as strictly as possible. The church however, confessed that the centre of Scripture is Christ. The text was seen to point beyond itself to another reality, which was not necessarily to be identified with the literal meaning of the text but which as the same time could only be accessed via it. Hence the development of "allegory" as a means of moving beyond the literal and on to the spiritual sense.
This has implications for how the church appropriates the law. Along with the rest of Scripture, it can't be taken literally - read "legalistically," - as to do so runs the danger of missing the real point. The law is connected with God's eschatological will for His people and makes ultimate sense within that framework. Reading it in the light of Christ, then, provides the church with the angle of reading that can open up what the text "is really all about," what its true kerygmatic function is within the overall economy of God.
This doesn't give you a concrete answer, but I think it shows a starting point. I think the hermeneutical implication is that for the Christian the narrative framework relativizes the legal content by placing it within its utlimate eschatological framework (e.g. Genesis 12.1-3). I don't know how a Jew relates law and narrative in this sense. A great way of seeing these two different theological hermeneutics at work is to look at the history of interpretation. Childs' 1974 commentary on Exodus does this helpfully. I strongly recommend you get hold of it and read the section on the Ten Commandments. He outlines the history of thought and looks for general trends, differences and similarities between the two traditions.