"In addition, pages give reference points during conversation, stuff like "check out the first sentence in the third paragraph on page 3" which gets very unwieldy without pages.

Isn't that why we have URLs?

As to legal requirements, perhaps Word is insufficient for a system with such strict legal requirements? Maybe a wiki-ish system that strictly enforced all the necessary requirements without requiring humans intervention? But I guess you are saying that the way the laws are written actually require actual pieces of paper to exist. In which case software doesn't help.

I'm curious, though, to know if that is the case or if businesses have sprung up specifically to meet the legal requirements of electronic document management for those vertical industries.