The second lord does indeed refer to Christ, but capitalization does not depend on whether or not a word refers to God, but on whether it is a title (then it is capitalized) or it is a common noun or adjective (it is not capitalized). Examples of this kind of contrast are: LORD God Almighty, but God is almighty. God is the King of Kings, but God is a great king.
Titles are capitalized even when they refer to human rulers. The title O King will be capitalized, as will the titles my Lord or Your Majesty when they are addressed to human rulers, whether good or bad. See also FAQ 3.
That capitalization does not mark deity or honor but only the presence of a title is indicted by the capitalization of Baal, Asherah, Zeus, Satan, the Devil, the Antichrist, Santa Claus, the Easter Bunny, and the Great Pumpkin.
In the polite, formal style of speech characteristic of Old Testament culture, terms like my lord and your servant are used as deferential substitutions for personal pronouns. To say “My lord gave this command to your servant” is considered more respectful than saying “You gave this command to me.” Since these terms are de facto pronouns, we would not capitalize either your servant, a term of humility, or the deferential pronoun my lord.
Capitalization or non-capitalization may also be used to express differences of emphasis. A writer may use “the temple” or “the Temple” to indicate whether he is thinking primarily of the type of building that this structure is (the temple), or he is emphasizing that this is the unique Temple of the LORD (the Temple). There are many cases of this in the Old Testament with choices like the ark or the Ark, the tent or the Tent, the dwelling or the Dwelling. In these situations the translator must make a decision whether or not to capitalize on a case-by-case basis, based on the context. In many of these cases the choice is debatable.
So what about Psalm 110 and other Messianic prophecies? Titles of the Messiah are capitalized. References to the Messiah that are descriptive terms are not.
Our Old Testament rubric for the term lord is: LORD for the Tetragrammaton/Yahweh; Lord for the divine title Adonai; and lord for the common noun adoni, unless it is a title addressed to a person.
In Psalm 110 the second word for lord in verse 1 is pointed as the common noun adoni, not as the divine name Adonai. David says, “LORD Yahweh made a decree to a person who is my lord.” If the passage had said, “Yahweh said to Adonai,” there would be no puzzle for Jesus to pose to his enemies (Mt 22:41-45). The dilemma that Jesus addresses to them is this. We all agree that the Messiah is David’s son. How then can David describe him as “my lord.” The necessary conclusion is that for David’s son to also be David’s lord, the Messiah must not only be David’s physical son, but he must also be David’s LORD God, who created David. In some contexts “Son of David” may be a Messianic title that needs to be capitalized, but in Jesus’ discussion in the gospels “David’s son” is a description of the Messiah’s origin, not a title. In Psalm 110:1 my lord is used as a term describing the Messiah’s nature and not as a title, so it is not capitalized.
There are many other cases in Messianic prophecy in which a word which is at first a descriptive term becomes part of a Messianic title. The description “David’s son” becomes a title “the Son of David.”
Another case is found in the prophecy of Daniel (Dn 7:13) where Daniel sees one who is “like a son of man.” This passage is certainly a basis for Jesus’ title “Son of Man,” but “son of man” is not yet a divine title in this verse (nor is it in Revelation 1:13).
A parallel situation exists in Isaiah 9. “For to us a child is born. To us a son is given; and the authority to rule will rest on his shoulders. His name will be called Wonderful Counselor, Mighty God, Everlasting Father, Prince of Peace.” The word “son” often is capitalized as part of Messianic titles such of “the Son of David,” “the Son of Man,” and “the Son of God,” but here, like the word “child,” it is a descriptive term. The text is telling us that this person who is a son of Israel and a child of Israel is also their God, who is their Everlasting Father.”
In those cases where a word that is at first descriptive, then become part of a title, we should not get the cart before the horse by making it a title prematurely. We should let the prophecy unfold, just as Jesus does in his discussion with his enemies. There are many examples of this in Messianic prophecy.
In such cases we will use footnotes to explain the progression from a descriptive term to a title (for example, from the noun satan, which means “accuser,” to the title Satan). Our first edition is not a full study Bible, but it will have footnotes to explain translation choices. Since capitalization or non-capitalization is a translation issue, footnotes that explain individual decisions would be appropriate.