Go to File|Options|Proofing>AutoCorrect Options>AutoFormat As You Type and make sure the "Straight Quotes" with “Smart Quotes” option is checked. Also, if you're doing the Find/Replace manually, your Replacement expression needs to be ", not ^&. A macro to do the replacement would work most efficiently by using the same process.

If it still doesn't work, perhaps the issue is related to your Windows Regional Settings. If they're configured for other than an English-language region, the " may not be recognised as a quote character for your region.

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Cheers,
Paul Edstein
[Fmr MS MVP - Word]