If it's LAN tournament, it means there aren't many participants, or at least no people from far away etc., so you can discuss the rules between yourselves.

Probably the most important thing is the game mode: if it's Default or Highlander or Shoppa. Also, things like turn time, size of teams, weapon scheme. It depends on how many people will play and how long you expect it to take.

As for general rules, you can either go with traditional ladder, where players are matched up initially and winners then compete with winners from previous rounds. Other choice is to make everyone play 2-4 rounds and winner is picked by highest acquired score (simplest is rounds won, but number of kills etc. can be counted too (which actually gives me idea for tournament-designed LUA script)). Two players with highest score could also play a final round.