Contrasting "in Christ" with "in the flesh":
Amazing and total change from the whole condition and standing of the first Adam, responsible for his own sins, into that of Christ, who, having borne the whole consequence of that responsibility in his place, has given him (in the power of that, to us, new life, in which He rose from the dead) a place in and with Himself, as He now is as man before God! It is to this position the apostle refers; only that he was given in a very extraordinary manner to enjoy the full fruit and glory of it during the period of his existence here below. His language as to this truth is remarkably plain, and therefore powerful. "When we were in the flesh," he says. Thus it is we speak, when we refer to a clearly bygone state of things, in which we are no longer — "when we were in the flesh" (that is, we are no longer in that position at all). "But," he says, "ye are not in the flesh, but in the Spirit, if so be the Spirit of God dwell in you." We are now alive in Christ. "If ye be dead," says he elsewhere, "to the rudiments of the world, why as though living (i.e. alive) in the world are ye subject to ordinances?" "For ye are dead, and your life is hid with Christ in God. When Christ who is our life shall appear, then shall ye also appear with him in glory."
The reader will forgive me, if I have dwelt so long upon the first expression of our chapter. I have done so because of its vast importance. It is the very heart of all Paul's doctrine, the true and holy way of full divine liberty, and the power of holiness. And because many Christians have not seized the force of this truth, nor of the expressions of the apostle, they use Christ's death as a remedy for the old man, or at least only learn forgiveness of past sins by it, instead of learning that they have by it passed out of the old man as to their place before God, and into the new in the power of that life which is in Christ. Ask many a true-hearted saint what is the meaning of "When we were in the flesh," and he could give no clear answer — he has no definite idea of what it can mean. Ask him what it is to be in Christ — all is equally vague.
A regenerate man may be in the flesh, as to the condition and standing of his own soul, though he be not so in God's sight; nay, this is the very case supposed in Romans 7, because he looks at himself as standing before God on the ground of his own responsibility, on which ground he never can (in virtue of being regenerate) meet the requirements of God, attain to His righteousness. Perhaps, finding this out, he has recourse to the blood of Christ to quiet his uneasy conscience, and repeated recurrence to it, as a Jew would to a sacrifice, a superstitious man to absolution. But he has no idea that he has been cleansed and perfected once for all, and that he is taken clean out of that standing to be placed in Christ before God. But if in Christ, the title and privilege of Christ is our title and privilege.
From "A Man in Christ", Collected Writings of J. N. Darby, Volume 7, p. 224