Microsoft Copilot for Word: What It Does, What It Doesn't, and What's Missing

What Microsoft Copilot Actually Does in Word

Copilot is impressive for first drafts. You describe what you want, it generates content. You highlight text, it rewrites for tone or clarity. You paste notes, it produces a structured document.

For basic document creation, it works.

Here's what Copilot can do in Word as of 2026:

Drafting from scratch:

• Generate entire documents from prompts
• Reference up to 20 existing files, emails, or meetings
• Create structured content based on descriptions

Rewriting and editing:

• Adjust tone (professional, casual, concise)
• Paraphrase text with multiple options
• Expand or condense content
• Convert text to tables

Summarization:

• Condense long documents into key points
• Extract action items
• Generate executive summaries

Agent Mode (February 2026):

• Iterative refinement through conversation
• Makes active changes while reasoning
• Works across Word, Excel, and PowerPoint

What Copilot Doesn't Do

No Track Changes

When Copilot rewrites your paragraph, the original disappears. There's no:

• Deletion markup showing what was removed
• Insertion markup showing what was added
• Author attribution (who made the change)
• Timestamp (when the change was made)
• Revision history for audit trails

For a quick email or internal memo, this is fine. For a contract negotiation where both parties need to see exactly what changed between draft 3 and draft 4, it's unusable.

No Revision-Aware Editing

Copilot doesn't understand existing track changes in your document. If you upload a contract that's been redlined by opposing counsel:

• Copilot sees the final state (as if all changes were accepted)
• It doesn't know which text is pending deletion
• It can't respond to specific tracked revisions
• Your counterparty's careful markups become invisible to the AI

No Batch Processing

You can't tell Copilot: "Review these 50 contracts against our standard terms and flag deviations." It works one document, one conversation at a time.

No Programmatic Access

There's no API for Copilot in Word. You can't integrate it into document automation workflows, pipeline it into your contract management system, or build custom applications on top of it.

The Track Changes Problem

Track changes aren't a nice-to-have for professional document workflows. They're the foundation of:

Legal document review:

• Redlining contracts requires visible deletions and insertions
• Opposing counsel needs to see exactly what you changed
• Audit trails protect against disputes about what was agreed

Regulatory compliance:

• SOX, HIPAA, and other frameworks require change documentation
• Reviewers must be able to trace who modified what
• "Just trust me, it's different" doesn't pass audits

Collaborative editing:

• Multiple stakeholders need to see each other's contributions
• Accept/reject workflow requires visible individual changes
• Attribution matters for accountability

When Copilot edits your document, you get a new document. You don't get a documented change. For workflows where the change history is as important as the content itself, Copilot doesn't work.

How Copilot Compares to Direct DOCX Editing

When Copilot Is the Right Choice

Copilot excels when:

• You're starting from blank page (first drafts)
• Internal documents where revision history doesn't matter
• Quick rewrites for tone or clarity
• Summarizing long content for personal use
• Brainstorming and ideation

For these use cases, the tight Word integration and conversational interface make Copilot genuinely useful.

When You Need Something Else

Consider alternatives when:

• Contracts and legal documents: Track changes are mandatory for negotiations
• Compliance-sensitive edits: Audit requirements demand revision history
• Multi-party review: Everyone needs to see who changed what
• Programmatic workflows: API access required for automation
• High-volume processing: Batch operations on multiple documents
• Existing redlined documents: AI needs to understand pending revisions

The Direct DOCX Editing Approach

Instead of working through Word's interface, direct DOCX editing operates on the document file itself:

from docxagent import DocxClient

client = DocxClient()

# Upload document with existing track changes
doc_id = client.upload("contract_draft.docx")

# Read the document - including pending revisions
content = client.read(doc_id, include_revisions=True)
# Returns: original text, tracked insertions, tracked deletions, authors, dates

# Make AI-powered edits WITH track changes
client.edit(
    doc_id,
    "Review the payment terms and suggest improvements",
    author="Contract AI"
)
# Changes appear as tracked revisions with proper attribution

# Download - track changes intact
client.download(doc_id, "contract_reviewed.docx")

The output document opens in Word with visible track changes. The AI's edits appear as insertions and deletions, attributed to "Contract AI" with timestamps. Your legal team can review, accept, or reject individual changes.

The Real Cost Comparison

Microsoft Copilot:

• $30/user/month + Microsoft 365 subscription
• Team of 10: ~$5,000-8,000/year total
• Limited to interactive use in Word
• No track changes, no batch processing, no API

Direct DOCX editing tools:

• API-based pricing (usage-dependent)
• Often $0.01-0.10 per document for batch operations
• Full track changes support
• Programmable and automatable

For high-volume document workflows, the economics can flip dramatically. Processing 1,000 contracts per year through Copilot requires $30/user/month licenses and manual interaction with each document. Processing them programmatically can be orders of magnitude cheaper.

What About Agent Mode?

Microsoft's Agent Mode (rolling out February 2026) promises more sophisticated document editing with reasoning and iterative refinement. Early indications suggest:

• More conversational back-and-forth editing
• Active changes with explanations
• Cross-application workflows (Word + Excel + PowerPoint)

But the fundamental architecture remains: Copilot operates through Word's interface, not directly on DOCX structure. Agent Mode may produce better edits, but those edits still won't generate proper track changes with revision history.

Watch this space—Microsoft may eventually add track changes to Copilot. Until then, workflows requiring revision history need different tools.

The Bottom Line

Microsoft Copilot is excellent for drafting and basic editing in Word. It's a genuine productivity boost for internal documents and first drafts.

It's not a solution for document workflows where track changes matter. Contracts, legal review, compliance documents, multi-party negotiations—anything requiring visible revision history needs tools that operate directly on DOCX structure with proper track changes support.

Don't force Copilot into workflows it wasn't designed for. Use it where it excels (drafting, summarizing, rewriting) and use purpose-built tools where revision tracking is critical.