This depends a lot on the practice. Transactional lawyers working in M&A and real estate encounter the issue of parallel drafts all the time. Personal injury lawyers tend to work in isolation and don't need all of git's functionality. Pretty much every lawyer redlines in some capacity, however, and benefit from visualizing a linear version history.
>And the other big thing was a network problem: a lawyer has to us microsoft office's version control because the opposing team is going to use it, so even if you use some better editor software it still has to be sent as a word file showing the tracked changes to the other side.
Yes, this is absolutely correct. This is one of the main things that keeps docx entrenched as the standard in legal collaboration. It would be an enormous faux-pas to send another lawyer a contract in an application that they're unfamiliar with. Backwards compatibility with their existing workflows is essential.