The term "out law" comes from when criminals were banished from medieval towns, essentially living outside the jurisdiction of that area.

Bandits would also live outside the kingdom as that was also not easily controllable and what happened outside was not easily punishable as it would be if you did a crime inside a kingdom.

So, being a bandit was quite easy, you just lived in the woods and attacked travelers, and you were outside the law, so it was up to the traveler to defend himself, wasnt the king's job.
A large job for knights was escorting travelers safely because of this.