Outlook is not very flexible, but you do have some options: two options. You can sort alphabetically by first and then last name or by the "file as" format, which is last name followed by first name.
Change the Sort Order of the "Select Names" Dialog in Outlook
To change how contacts are sorted in Outlook's Select Names dialog:
- In Outlook 2007:
- Select Tools | Account Settings... from the menu.
- Go to the Address Books tab.
- In Outlook 2003:
- Select Tools | E-mail Accounts... from the menu in Outlook.
- Make sure View or change existing directories or address books is selected.
- Click Next >.
- Highlight the desired address book.
- Click Change....
- Select the desired sort order (First Last or File As) under Show names by.
- Click Close.
- Click Finish