How do I alphabetize by last name, when the list is (first name, last name)?

Provided that each name is in a separate paragraph, you can sort by the second word. If you have some names that have more than just first name and last name, then you will have to do some initial preparation to make the list consistent. For example, if you have a name such as Mary Ann Smith, you will need to replace the space between "Mary" and "Ann" with a nonbreaking space (Ctrl+Shift+Space) to make Word treat "Mary Ann" as one word.

When the list is thus prepared:

1. Select the list and click the Sort button in the Paragraph group on the Home tab.
2. In the Sort Text dialog, click the Options button .
3. In the Sort Options dialog, choose Other for "Separate fields at," and type a space in the box (the default appears to be a hyphen).
4. Click OK.
5. Now click the arrow by the dropdown box for "Sort by," and you should see Word 1 and Word 2.
6. Select Word 2 and click OK.

select the list, click on the Home tab/ Paragraph group / Sort command. Click on the "Options button". Then you can click on the "Sort by" drop down and select Field 2.

If the list is all like that, exactly 2 names separated by a space, I would suggest converting it to a 2 column table. Then you can sort by the second column.