Some drawbacks to this feature are that you lose a little control when you are typing. Word formats for you and some users do not like this. Also, on certain items, you will get a number when you do not expect or need one. For example, you have an attorney whose name begins with an initial (A. George Smith). When you type the name and press ENTER, the first initial "A." converts to an automatic number.
This feature is easiest to use when you combine it with Word's built-in heading styles. However, you can map a custom heading style to the multilevel numbering feature—it just takes more work. Word handles nine levels, but any document with more than four levels should receive a serious developmental edit. More than four becomes confusing and perhaps worse, unreadable.
The heading here could be anything: affirmative defenses in an answer, articles in a contract, etc. It doesn’t matter; the technique is the same with only slight variations. The result is that you’ll have a heading saved in your Quick Parts that will be numbered correctly, no matter how many items you add or delete. This makes this technique particularly useful in building templates for common documents; because it’s always easier to delete than add, they’ll re-number themselves after editing.
In this situation I would suggest using an Alternate Layout. Once the content is final, choose Create Alternate Layout from the Pages panel menu. Make sure to create the new layout the same size and orientation as the original and then use the Numbering and Section Options dialog to specify the numbering required for the second catalog. The Print dialog will then let you select which layout to print.
The process of setting up chapter and volume numbers is essentially the same as setting up page numbers. You can use these numbering elements as a way to keep track of any number of items. Yes, they are labeled “chapters” and “volumes,” but if you ignore the labels, you’ll see that you can keep track of any “section” in a document. In fact, if you count page numbers, chapter numbers, volume numbers, and secondary page numbers, you’ll see that you have four different numbering methods at your disposal.
CK Note: Word 2007 - 2013 interface has an different automatic numbering scheme which I have been told is much less subject to corruption. Microsoft Word 2010 Bible by Herb Tyson, MVP. However numbering is still very imperfect in these later versions. I still recommend following Shauna Kelly's step-by-step instructions (see above) if setting up numbering in a template or in a document likely to be heavily edited. If you start without doing this and end up with "spaghetti numbering," fixing it will be a very large chore!