My kids like to find what they want when they want it. They get fed up digging through a big bin for one piece. Having even half of my collection sorted lets them have far more fun and keeps them building, which is really the whole point.
I wanted to make the best use of the drawer space I had, so I tried a few different ways of sorting my LEGO. While experimenting with an algorithm to plan it, I landed on something that actually worked for me, and I thought it might be useful to other people too.
I've got two IKEA Alex units, 12 drawers of 8 compartments. I build with my kids, mostly little towns; I also build some of my own very amateur creations. I group parts by how we play: a drawer for minifig parts, one for leaves and trees, and the basic bricks and plates together for house building.
I turned the algorithm into a website which asks you 6 questions about your collection and your drawers, then gives you a plan for every compartment and a printable index sheet. The sheet is very basic right now, but it's handy to have next to your collection. You don't need to know what bricks you have, no sign-up required, and it's free at trybricksort.com.
Fair warning: this probably isn't for anyone with a wall of a thousand tiny compartments. It's aimed at the more casual builder.
Feedback welcomed