Stress can be a good thing . . . if it motivates you. But when stress becomes debilitating, it is no longer a good thing.
A professor during my 1L year of law school emphasized this exact point multiple times in class, especially as finals drew closer. He reminded us that an appropriate level of stress is probable in law school. In fact, it is expected due to the high pressure of the classes and the sheer volume of material. What this professor warned against, however, was stressing over classes, finals, and studying to the point that you could no longer study effectively.
Of course, when he first spoke of this "motivating" stress vs. "debilitating" stress, I blew it off as just another speech trying to encourage students to study more than they already did. As my first round of law school finals crept closer, however, I began to realize the truth in my professor's words. I watched my fellow students and I freak out the closer finals came, and I witnessed it get to the point that the stress levels were too high to study effectively. The problem I noticed with our response to high stress levels was that we tended to overdo the "remedy" portion of destressing. Rather than taking a short break, we'd spend a day or two (or an entire weekend) ignoring our studies because we were "too stressed" and "too tired" to think. Which very well may have been the case, but our approach needed amendment in order to truly excel on our finals.
Over the course of my law school career, I and my fellow classmates eventually discovered what worked for us. As I've said before (see this post), there is enough time in law school to get all of your work done, and done well. In addition to developing our time management skills, we learned better how to study to suit our needs. (See our post hereon study tips.) The key to our ultimate success, however, goes beyond mere memorization and performing well on the exams. We could have studied our eyes red for hours every day and still failed our exams if we hadn't also learned how to balance our stress levels and seek the most effective study habits. While the perfect blend differs from person to person, the foundation is moderation.
"Virtue, then, being of two kinds, intellectual and moral, intellectual virtue in the main owes both its birth and its growth to teaching (for which reason it requires experience and time), while moral virtue comes about as a result of habit, whence also its name (ethike) is one that is formed by a slight variation from the word ethos (habit). From this it is also plain that none of the moral virtues arises in us by nature; for nothing that exists by nature can form a habit contrary to its nature. For instance the stone which by nature moves downwards cannot be habituated to move upwards, not even if one tries to train it by throwing it up ten thousand times; nor can fire be habituated to move downwards, nor can anything else that by nature behaves in one way be trained to behave in another. Neither by nature, then, nor contrary to nature do the virtues arise in us; rather we are adapted by nature to receive them, and are made perfect by habit."
~ Aristotle, Nichomachean Ethics
Aristotle taught of a mean, one often alluded to thus: "Virtue is the golden mean between two vices, the one of excess and the other of deficiency." Taking this approach to the study of law, a successful student is one that finds balance between study and leisure, between stress and peace. Striking this balance takes time and effort. It is not a skill learned in a day . . . but then again, Rome wasn't built in a day either.
Everyone you ask will have a different "magic recipe" for succeeding in law school and in life . . . ultimately, it boils down to your individual needs and abilities. Some people can study for 8-12 hours straight and retain the information. Others can study for 2-3 hours and then need a 20-60 minute break. As you enter this finals period, keep in mind your stress levels. Ask yourself candidly whether your stress over finals and studying is helping or hindering your actual studies. Are you spending more time freaking out about the exam than actually studying for it? If so, perhaps it's time to take a short break so that you can come back with renewed vigor and tackle that exam. However you study, make sure that you are effective. Do not let your stress debilitate you. Take control of that stress and use it to motivate your efforts even more.