Use the sorted function's key parameter:
sorted(people, key=lambda dct: dct['name'])
There is an excellent Sorting HOWTO which explains how this works.
>>> people = [
    {'name' : 'Bob', 'number' : '123'},
    {'name' : 'Bill', 'number' : '234'},
    {'name' : 'Dave', 'number' : '567'},
]       
>>> sorted(people, key=lambda dct: dct['name'])
[{'name': 'Bill', 'number': '234'}, 
 {'name': 'Bob', 'number': '123'}, 
 {'name': 'Dave', 'number': '567'}]
Alternatively, you could use
import operator
sorted(people, key=operator.itemgetter('name'))
Using operator.itemgetter('name') is slightly faster than using 
lambda dct: dct['name'].