We use DKP and are in the same situation as you are. Small guild and everyone knows everyone well, a lot in real life. I know people have said do a need before greed or simply be friends and decide who needs gear, but I feel it would be better to get a system in place now and stick with it. Down the road one or two of them may not raid and you may end up getting a few new people in the guild. With a system in place, and again we use DKP in our 10m, you can tell recruits up front the system and they'll know where they stand.
We also hold our DKP system all the way through a expansion and then reset when a new one comes out. This is something that is up for debate, however. You may want to consider a DKP reset every tier so the people don't hoard it before another tier comes out and pass on upgrades.