Can Copilot Review a Contract? A Practical Guide for Lawyers

Generative artificial intelligence (GenAI) continues to be integrated into productivity platforms, and Microsoft Copilot leads the innovation. Many industries already use Copilot for tasks such as content creation and data analysis. 

Can Copilot review a contract with the precision required for legal work, as well? 

Microsoft 365 Copilot's integrates with Word, a central tool in most legal workflows. Its capabilities have been increasingly tested for legal tasks, such as summarizing and editing agreements. Copilot can assist with reviewing contracts. However, it is not a legal-specific solution.

This article offers a pragmatic review of Copilot’s capabilities in the legal context and compares it with those of legal tools such as Spellbook, an AI-powered contract assistant purpose-built for transactional law.

Key Takeaways

• Microsoft Copilot is accessible and helpful for general document tasks. However, it lacks the legal training, jurisdictional awareness, and accountability features needed to meet the ethical requirements of legal work.
• Legal-specific AI tools, such as Spellbook, can serve as a more reliable, purpose-built alternative to Microsoft Copilot. It offers legal professionals structured support for contract drafting and review.
• AI tools can enhance legal workflows. However, AI cannot offer legal advice or replace the judgment, ethics, and responsibility of a licensed legal professional.

AI Copilot for Reviewing Contracts

Microsoft Copilot works directly with Microsoft 365 applications, including Word, Outlook, and Teams. Lawyers can review, summarize, and refine contracts in familiar workflows.

• Contract review: Copilot can generate summaries of lengthy agreements, identifying key clauses and enabling users to jump to specific sections requiring further review. Within Microsoft Word, legal professionals can compare multiple versions of agreements, with lists of the differences and potentially highlighted missing provisions.
• Strategy development: Copilot can aggregate internal documentation, extract relevant case information, and brainstorm initial strategies based on historical patterns. Legal professionals may prompt Copilot to generate summaries of selected strategies and draft outlines for internal review.
• Legal guidance: Copilot can analyze internal data and map it to policy frameworks. In this capacity, legal departments may use it to align documentation with regulations. Lawyers can use Teams to transcribe stakeholder meeting notes or request Copilot to draft external communications such as press releases or FAQs.
• Negotiation: Copilot can capture key negotiation points during Teams meetings, retrieve relevant discussions and emails, and generate preliminary term sheets. It can also help analyze a counterparty’s proposal. However, this analysis remains general and lacks the depth of legal expertise required for enforceable drafting.

Vodafone, a leading global connectivity and technology company headquartered in the United Kingdom, saved four hours per person per week with Microsoft Copilot.

“We review a lot of contracts. Microsoft 365 Copilot has helped us review those documents more quickly. This has helped us to provide more accurate and speedy contract reviews and turnaround times.”

– Hazel Butler, Legal and Business Integrity Team

What Lawyers Should Know Before Trusting Copilot with Contracts

Microsoft Copilot is responsive and intuitive for general legal tasks. However, it falls short in areas critical to legal professionals.

• Not trained on legal data: Copilot is not trained to understand and process legal language. It may not accurately interpret obligations or regulatory nuances or recommend legal edits with a contextual understanding.
• No jurisdictional awareness: Copilot lacks the ability to evaluate contracts against jurisdictional frameworks such as U.S. state laws or Canadian compliance regulations. This presents a significant challenge for lawyers working across multiple locations.
• Risk of hallucinations: AI hallucinations, where the model generates incorrect or fabricated output, remain a concern. Copilot may mistakenly highlight clauses that do not exist or misinterpret key terms, thereby compromising legal accuracy and increasing risk.

Given these gaps, legal teams should adopt a structured approach to evaluating Copilot. See how to choose the right AI contract analysis software.

Read more: Is Copilot private?

How Spellbook Takes Contract Review Further (and Safer)

Trained to understand legal language, Spellbook is a dedicated AI platform for transactional lawyers that supports scalable workflows and enhances document security, accuracy, and compliance.

• Designed for legal use cases: Spellbook is built specifically for contract drafting, analysis, and negotiation, supporting licensing agreements, employee contracts, M&A work, and more. It helps identify missing protections, flag compliance issues, and verify contract consistency against custom and standard benchmarks.
• Seamless Microsoft Word integration: Spellbook generates, summarizes, revises, and inspects contracts in Word. There’s no need to switch platforms. The system tracks edits under the lawyer’s name to preserve legal attribution and document history.
• Clause library and precedent management: Spellbook includes a built-in, customizable clause library that enables lawyers to reuse standardized terms. Lawyers can retrieve clauses using keywords, and Spellbook automatically adapts the language to the current contract’s context.
• Intelligent redlining and playbook reviews: Spellbook’s review tools include automated redlines, custom playbooks, and rule-based analysis that help lawyers apply consistent language across documents. These features ensure that terms align with internal and industry standards.
• Compliance and data privacy: Spellbook complies with international data protection frameworks, including the General Data Protection Regulation (GDPR). The system retains no sensitive client data, aligning with legal ethics and data confidentiality obligations.

Today, Spellbook is trusted by more than 4,000 law firms and in-house teams worldwide, having reviewed over 10 million contracts.

Schedule a consultation with Spellbook now.

Copilot vs Spellbook: Quick Comparison Table

The main difference between Microsoft Copilot and Spellbook lies in their purpose. Copilot is designed for general business productivity, while Spellbook is purpose-built for lawyers handling contracts.

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Both Copilot and Spellbook can analyze legal documents quickly and support drafting, comparison, and review tasks. 

However, AI, no matter how advanced, cannot replace a human lawyer’s judgment. It cannot offer legal advice, interpret complex legal obligations, or ensure compliance with jurisdictional requirements, with the nuance and accountability that legal professionals provide. 

AI tools can enhance legal practice, but not replace the expertise that only a trained lawyer can deliver.

For an in-depth comparison of industry-leading legal AI platforms, see the best AI contract redlining tools for lawyers.

Frequently Asked Questions 

What is Microsoft Copilot and What Does It Claim to Do?

Microsoft 365 Copilot is an AI-powered feature in Word, Excel, Outlook, and Teams that automates writing, summarization, and formatting, among other tasks.

Is It Safe to Use Copilot for Sensitive Contracts?

Copilot offers enterprise-grade security. However, it is not purpose-built for legal confidentiality. Legal-specific AI tools provide enhanced protection for attorney-client information.

Can Copilot Suggest Redlines in a Contract?

Copilot can propose general rewrites. However, it lacks the structured, legally specific redlining capabilities needed for enforceable, compliant revisions. It does not support playbook-based negotiations or maintain revision history aligned with legal standards.