I work in the legal field and they will never, ever use Google Docs for anything. You do not put important documents on another company's computers and you especially don't do that if they are in the U.S. (They ban dropbox for the same reason).
I wonder if they've consider developing a Google Apps appliance, a contained webserver (physical or virtual) with just a simple API to store and load documents, email, etc. You'd load the software from 'the cloud', which would then call the appliance on the LAN to get your stuff.
Seems to satisfy the privacy requirements while keeping the more maintenance heavy components on their machines.
