United States. Sell-side M&A advisory fees
What are M&A advisor fees on a deal your size?
Advisors quote a scale and sellers pay an effective rate, and the two are rarely the same number. Two conventions dominate US sell-side work, the Lehman formula and its doubled variant, and on smaller deals both are overridden by a minimum fee that never appears in the headline. Price your own deal on either scale, add the minimum and the retainer, and see the rate you would actually be paying.
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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 one across the deal sizes the lower middle market actually transacts at, so the gap between the headline and the rate is 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, and 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, and the IRS treats an asset sale as a transfer of separate assets requiring residual-method allocation while 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 independent site operated by Ellul Solutions Ltd. 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?
Two conventions dominate sell-side work and neither is a statutory rate. The Lehman formula charges 5, 4, 3, 2 then 1 percent on each successive million of deal value; Double Lehman doubles it to 10, 8, 6, 4 and 2 percent and is now standard in the lower middle market. Because both are ladders, the effective rate falls as the deal grows: Double Lehman is 10.00% on a $1M deal, 6.00% at $5M and 2.80% at $25M. Below roughly $2M a minimum fee usually overrides the scale entirely.
What is the Lehman formula?
An American fee ladder: five percent of the first million of deal value, four percent of the second, three of the third, two of the fourth and one percent of everything above. It was written when a million dollars was a large transaction, which is why applying it unchanged to a modern $2M business sale produces a $90,000 fee for a full sell-side process, and why 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, and treat the answer as more important 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 single word is worth $120,000, and a firm confident in its own process is usually comfortable crediting it.
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: without one, a seller could terminate the week before signing. Fairness turns on two details. Twelve months is ordinary and open-ended should be refused, and the fee should apply only to buyers on a written list delivered at termination rather than to any buyer at all. The 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 rather than a floor. Double Lehman on a $1,500,000 deal produces $140,000, so a $150,000 minimum overrides the ladder completely and the effective rate is 10.00%. At $1,000,000 the same minimum is 15.00%. Two firms both quoting Double Lehman with minimums of $100,000 and $200,000 are quoting prices that differ by a factor of two, and the phrase Double Lehman does not reveal it.
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 the sale of an eligible privately held company without registering, where EBITDA was under $25,000,000 or gross revenues under $250,000,000 in the prior fiscal year and the acquirer is expected to control and actively manage the business. Above those thresholds a registered broker-dealer is required, and registered firms can be checked 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
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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