Set the document margins at 1.4" (left) and 1.0" (right). Set line number distance from left margin at "auto". This will get your whole document w/line numbers within the frame of a regular document with 1" margins all round.
I now use 10 point Courier for the basic font.
Set line numbers to continuous: We used to do page by page (following Gail's practice for typewritten transcript) but with different page formats (A4, US Letter etc.), it's more reliable to use continuous line numbers and to refer to transcript in papers by the absolute line numbers from standard transcripts (rather than page + line number). Word line numbers are derived from the default font in the style that you're using. So it can pay to make this Courier! Or another font smaller than Courier 10. Bigger line number fonts than the transcript itself look a bit weird.
Use no tabs. Use five spaces to move from the speaker designation to the text of the talk. This will accommodate a two character courier arrow (->) + a number for the arrow if there are more than one and they need labeling.
Use hard returns at the end of lines.
Standard three letter speaker designations are efficient to work with. So the next effect is:
121 Ben:. . . . .The quality of mercy is not strained.
122 Ann:. 1 - > .It droppeth as the gentle rain from heaven.
This set up will allow to to cut and paste transcript almost anywhere while keeping its basic formatting. Of course the line numbers won't transfer, but you'll find that you have the space to add line numbers in the left side, either using Word or by hand, without the lines wrapping on the right hand side. If there are problems of wrapping, you can always shrink the font to Courier 9 without it looking too awful.
Word line numbers cause big hassles when sending out papers to journals,
so I've shifted to 'hard' manual line numbering in actual papers.
You can write a macro for this that makes it fairly quick and easy (and