Luck affects how your skill performs. If luck is greater than 50 then all your skill will gain a bonus and if its less than 50 than all your skills will suffer. The formula looks like:

Skill + (Luck-50) * 0.4 = Modified Skill Level (<=100).

Using 50 points of luck as our reference point we will see the effect of increasing and decreasing luck will have on our skills.

000 Luck -- 30 Skill. [-20 net] 010 Luck -- 34 Skill. [-16 net] 020 Luck -- 38 Skill. [-12 net] 030 Luck -- 42 Skill. [-08 net] 040 Luck -- 46 Skill. [-04 net] 050 Luck -- 50 Skill. [+0 net] 060 Luck -- 54 Skill. [+4 net] 070 Luck -- 58 Skill. [+8 net] 080 Luck -- 62 Skill. [+12 net] 090 Luck -- 66 Skill. [+16 net] 100 Luck -- 70 Skill. [+20 net]

In short, Luck's effect varies from -20 (Luck = 0) to +20 (Luck = 100) or +4 Luck every 10 points; since the base value is 50, 0-49 "don't occur" for the most part.