United States. Sell-side M&A advisory fees
What are M&A advisor fees on a deal your size?
Advisors quote a scale; sellers pay an effective rate. US sell-side work runs on the Lehman formula or its doubled variant, and on smaller deals a minimum fee overrides both. Add the minimum and retainer to see your real rate.
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What the Lehman and Double Lehman scales cost at US deal sizes, 2026
Last updated
Both scales are quoted as a ladder of percentages and paid as a single effective rate. This table runs each across the deal sizes the lower middle market actually transacts at. The gap between headline and rate is then visible before an engagement letter is signed.
Every figure is this page's own calculator, run at zero retainer and zero minimum fee, so it shows the SCALE alone with nothing layered on top. The Lehman ladder is 5, 4, 3, 2 then 1 percent on each successive million of deal value; Double Lehman is 10, 8, 6, 4 then 2 percent. Neither is a statutory rate and no source publishes them as one: they are market conventions, which is why they are presented as arithmetic you can check rather than as a measurement. Real engagement letters add a minimum fee, a retainer and a tail, and any of the three can move the effective rate by more than the choice of scale does. Deal-size bands are those used by the IBBA and M&A Source Market Pulse survey, which tracks US business sales up to $50M.
| Deal value | Lehman fee | Lehman effective rate | Double Lehman fee | Double Lehman effective rate |
|---|---|---|---|---|
| $1,000,000 | $50,000 | 5.00% | $100,000 | 10.00% |
| $2,000,000 | $90,000 | 4.50% | $180,000 | 9.00% |
| $3,000,000 | $120,000 | 4.00% | $240,000 | 8.00% |
| $5,000,000 | $150,000 | 3.00% | $300,000 | 6.00% |
| $10,000,000 | $200,000 | 2.00% | $400,000 | 4.00% |
| $25,000,000 | $350,000 | 1.40% | $700,000 | 2.80% |
- The Lehman scale's effective rate falls from 5.00% on a $1M deal to 1.40% on a $25M one, because every scale is a ladder rather than a flat percentage.
- Double Lehman is exactly twice the original at every deal size, which is why quoting a scale without naming which one says almost nothing.
- A minimum fee overrides both below a certain size: a $150,000 minimum on a $1.5M deal is a 10% effective rate whatever scale is printed above it.
- Above $25,000,000 of EBITDA an advisor can no longer rely on the M&A broker exemption and must be a registered broker-dealer.
- Retainers credited against the success fee cost nothing at completion; uncredited ones are additive, and the engagement letter decides which.
Cite this page
“What the Lehman and Double Lehman scales cost at US deal sizes, 2026”, M&A Advisor Fees, https://madvisorfees.com/ (updated 2026-08-15). Every figure is this page's own calculator, run at zero retainer and zero minimum fee, so it shows the SCALE alone with nothing layered on top. The Lehman ladder is 5, 4, 3, 2 then 1 percent on each successive million of deal value; Double Lehman is 10, 8, 6, 4 then 2 percent. Neither is a statutory rate and no source publishes them as one: they are market conventions, which is why they are presented as arithmetic you can check rather than as a measurement. Real engagement letters add a minimum fee, a retainer and a tail, and any of the three can move the effective rate by more than the choice of scale does. Deal-size bands are those used by the IBBA and M&A Source Market Pulse survey, which tracks US business sales up to $50M.
How this is worked out
- The Lehman formula and its Double Lehman variant are American conventions, not statutory rates: 5-4-3-2-1 percent on each successive million of deal value, and 10-8-6-4-2 percent on the doubled scale. Nothing obliges an advisor to use either, and larger deals are routinely quoted on bespoke scales that fall well below both.
- A MINIMUM FEE overrides the scale entirely below a certain deal size, and on small transactions it is usually the number that actually applies. Enter yours: on a $1,500,000 deal a $150,000 minimum is a 10 percent effective rate however gentle the published scale looks.
- Retainers may or may not be credited against the success fee, and the difference is the whole retainer. Ask which, in writing, before signing.
- This calculator prices the ADVISOR's fee only. Legal, accounting, quality of earnings and escrow costs sit outside it. The SBA's guidance on preparing a sales agreement tells sellers to note all adjustments, broker fees and any other aspects relevant to the terms.
- No US tax treatment is modelled. How a fee interacts with your proceeds depends on the deal structure. The IRS treats an asset sale as a transfer of separate assets requiring residual-method allocation. A stock sale usually realises capital gain or loss. That is a question for your own tax adviser, not for a calculator.
M&A Advisor Fees is an information site. It is not affiliated with, endorsed by or connected to any advisory firm or regulator named here, and it is neither a law firm nor a tax adviser. Nothing on it is legal, tax or transaction advice. The Lehman and Double Lehman ladders are market conventions rather than statutory rates, and this page prices them as arithmetic you can check; what any particular advisor charges is set by an engagement letter, and the minimum fee, retainer credit and tail in that letter routinely matter more than the scale printed at the top of it. We take no commission from any firm and carry no paid placements.
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Frequently asked
What are typical M&A advisor fees in the US?
Neither is a statutory rate. Lehman charges 5, 4, 3, 2 then 1 percent on each successive million. Double Lehman, now standard in the lower middle market, charges 10, 8, 6, 4 and 2 percent. Effective rates fall with size: 10.00% on $1M, 6.00% at $5M, 2.80% at $25M. Below roughly $2M a minimum fee usually overrides the scale.
What does an M&A advisor charge, and what is the usual fee structure?
Usually three parts. A retainer, monthly or up front, may or may not be credited. A success fee on completion, on a Lehman or Double Lehman ladder or a flat percentage. A minimum fee replacing the ladder on small deals. The tail and the value charged on (enterprise or equity) move the cost as much as the rate.
What M&A advisory fee percentage should I expect?
It falls as the deal grows. On Lehman it is 5.00% at $1M, 3.00% at $5M, 2.00% at $10M and 1.40% at $25M; Double Lehman is twice that. Of the 84 advisors' pages we read for our M&A Advisor Fee Index on 12 October 2026, 7 printed a percentage: 1.5% to 10%, median 4%.
What is the Lehman formula?
An American fee ladder: five percent of the first million of deal value, four of the second, three of the third, two of the fourth and one percent above. It dates from when a million dollars was large. Unchanged, it prices a modern $2M sale at $90,000, so the lower middle market moved to the doubled version.
What is Double Lehman?
The same ladder at ten, eight, six, four and two percent, so exactly twice the original at every deal size. It is now the more common quote below $50M. An advisor who says they charge 'the Lehman scale' without specifying which one has told you almost nothing, because the two differ by a factor of two on every transaction.
Should the retainer be credited against the success fee?
Ask for it; the answer matters more than the retainer's size. A credited retainer is an advance deducted from the completion fee, so on a deal that closes it costs nothing beyond timing. An uncredited one is additive. On a twelve month mandate at $10,000 a month, that word is worth $120,000.
What is a tail clause and is it reasonable?
It keeps the success fee payable if you sell to a buyer the advisor introduced, for a period after the mandate ends. It is reasonable in principle. Twelve months is ordinary; refuse open-ended. The fee should apply only to buyers on a written list delivered at termination. That named list is the most valuable amendment a seller can make.
Why does the minimum fee matter so much on a small deal?
Because below about $2M it is the price, not a floor. Double Lehman on $1,500,000 is $140,000, so a $150,000 minimum overrides it: an effective 10.00%. At $1,000,000 the same minimum is 15.00%. Minimums of $100,000 and $200,000 on the same Double Lehman quote differ by a factor of two.
Does my advisor need to be a registered broker-dealer?
Not necessarily. The M&A broker exemption at 15 U.S.C. 78o(b)(13) lets a firm broker an eligible privately held company sale unregistered. Prior-year EBITDA must be under $25,000,000 or gross revenues under $250,000,000, and the acquirer must expect to control and actively manage it. Above that a registered broker-dealer is required; check firms free on FINRA BrokerCheck.
Related guides
Each one cites where its numbers come from.
- The Lehman formula, and why Double Lehman replaced it
The 5-4-3-2-1 ladder, the doubled version now standard in the US lower middle market, and the deal size where each stops making sense.
- M&A retainers: credited, uncredited, and what each means
A retainer credited against the success fee costs nothing at completion. An uncredited one is pure addition. The engagement letter decides, and it is negotiable.
- The tail clause: paying a fee after the mandate ends
A tail makes the success fee payable if you sell to an introduced buyer after termination. Standard and reasonable, but its length and its buyer list are negotiable.
- The minimum fee: what actually applies on a small deal
Below about $2m, the published scale is decoration and the minimum fee is the real price. How to find your effective rate before signing.
Sources
This site's own datasets, every figure quoted from its source and dated:
- The median published figure in the M&A Advisor Fee Index is 4 percent across 7 sources' own pages (range 1.50 to 10 percent), read 11 November 2026.
- The median published figure in the Sale Cost Stack is 20,500 USD across 2 sources' own pages (range 6,000 to 35,000 USD), read 10 November 2026.
Price the letter, not the scale
Lehman and Double Lehman at your deal size, with the minimum fee, the retainer credit and the tail that decide what you actually pay.
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