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Ian Lamont discusses office compatibility mode for Google Docs, a feature that allows users to edit Microsoft Word documents without needing the Word software. To access this feature, users must have the "Office editing for Docs, Sheets, and Slides" extension installed on their Chrome browser. This extension acts as a plugin, enabling users to work on Word documents seamlessly within Google Docs. While this feature is convenient, there are certain limitations users should be aware of when utilizing office compatibility mode.