I free school mine on occasion, and expect them to obey my voice commands as if I was lunging.
Just letting them run around and around if of no benefit except a little exercise.
I walk trot and canter mine on command and they know to change the rein when asked etc.
As for the size of the school well it really depends on what you have access to, ours is 90 x 60 feet, not sure what that works out in metres.