Office doesn't annotate well enough for law.
I think you need to be more specific than "the law". Our lawyers frequently use Microsoft Word for redlining contracts, works great. Sharepoint Document Libraries actually work really well for storing these. There are certainly lots of other systems that work as well, or better (ie Enterprise File Sync and Share Applications like Box, Syncplicity, etc).
"Don't discount flying pigs before you have good air defense." -- jvh@clinet.FI