Microsoft has introduced an AI Legal Agent in Word, designed to streamline contract reviews by offering automation, smarter insights, and improved efficiency for legal professionals. Before gradually introducing it, the company will seek legal professionals’ feedback.
Microsoft has officially announced a new AI tool called Legal Agent for Microsoft Word. According to the blog post, the feature is based on agent-based AI tools and is intended to handle structured, repeatable legal tasks more consistently and accurately.
The Legal Agent is designed specifically for legal use cases and operates on predefined workflows, similar to how legal teams review agreements, including clause-by-clause analysis against internal playbooks. The new tool will assist users in identifying risks, and comparing contract versions. It will also highlight obligations and link its recommendations directly to the source text for verification.
The new tool can create negotiation-ready edits with tracked changes. It will allow lawyers to draft precise revisions without disrupting the document’s formatting. Legal Agent is also designed to work with existing documents that have already been edited.
According to the company, the Legal Agent makes use of a specialised engine that understands the structure of Word documents beyond just the visible text, such as tables, lists and formatting. This allows users to make consistent edits while decreasing reliance on traditional large language model outputs for each change.
A post from Microsoft Office Product Group president Sumit Chauhan stated: “The agent applies edits in the document through a purpose-built insertion algorithm to drive consistency regardless of how each edit was introduced. The agent’s redlining engine understands the structure of a Word document, not just visible text.”
“It understands and structures Microsoft 365 document format into a representation that preserves formatting, lists, tables, and tracked changes. From there, the agent applies a deterministic resolution layer to the edits, including author-specific changes, rather than relying on an LLM to generate each revision directly. This provides a more reliable foundation for handling complex contracts while helping reduce latency and cost,” the post added.
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To test this new Legal Agent in Word, organizations will need to join the Microsoft Frontier program from the Microsoft 365 Admin center and assign Microsoft 365 Copilot licenses to their users. Once enabled, the new AI agent will be available from the Copilot panel in Word for Windows.
The company also stated that the feature works within the current Microsoft 365 environment. This means the legal workflows remain protected by enterprise-grade governance controls.
In terms of availability, the feature is available only to users in the United States through Microsoft’s Frontier program and can be accessed directly in Word using Copilot.