This should work, single quote or not:
using System;
using System.Text.RegularExpressions;
public class Program
{
public static void Main()
{
string pattern = @"\'?she\'?";
string input = "He and 'she' are my Dad friends";
string result = Regex.Replace(input, pattern, "Latha", RegexOptions.None);
Console.WriteLine(result);
}
}