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What is a typical M&A advisor success fee structure?

Published August 13, 2026Updated September 26, 2026

A typical M&A advisor success fee is a percentage of the deal value, paid only when the sale closes, and the percentage falls as deals get larger: in a 2024–25 survey of 456 middle-market advisors, the most common effective success fee was 4.8% on a $5 million deal and 2.0% on a $100 million deal (Firmex, Global M&A Fee Guide 2024-25, p. 22). Most advisors also charge a work fee while the engagement is running.

How the success fee is calculated

Advisors use three main structures. In the Firmex survey, 41% used a Lehman-style formula, where the rate decreases as the price rises; 27% charged a flat percentage; and 21% used an accelerator, where the rate increases above a target price (Firmex, p. 21).

The classic Lehman formula starts at 5% on the first $1 million and 4% on the second million, stepping down from there. "Double Lehman" starts at 10% and falls to 2% (Firmex, p. 21).

Illustration, not a quote: under the classic formula, a $3 million sale would produce $50,000 + $40,000 + $30,000 = $120,000, an effective fee of 4%.

Typical success fees by deal size

Most common effective success fee in 2024, by deal size:

  • $5 million deal: 4.8%
  • $10 million deal: 4.0%
  • $20 million deal: 3.4%
  • $50 million deal: 2.7%
  • $100 million deal: 2.0%
  • $150 million deal: 1.9%

Source: Firmex, Global M&A Fee Guide 2024-25, p. 22. These are survey-wide figures. Firmex reports that success fees in North America ran higher than in Europe, by 1.1 percentage points on smaller deals and 0.4 points on the largest.

Smaller, "main street" businesses are usually sold by business brokers rather than M&A advisors. The International Business Brokers Association says broker commissions on these sales can range from 8% to 15% of the final sale price and may be subject to an agreed minimum (Your Guide to the Business Brokerage Profession, IBBA, p. 10). Neither source gives a figure for deals between main-street size and $5 million.

Work fees and retainers

Many advisors charge a work fee on top of the success fee, either monthly or as a fixed amount upfront. In 2024, the most common monthly work fee was $5,000 to $10,000, and the most common fixed engagement fee was also $5,000 to $10,000 (Firmex, p. 18). 57% of firms said they deduct work fees already paid from the success fee when a deal completes (Firmex, p. 27). Our guide to retainer fees covers whether they're refundable.

Terms to settle before you sign

The headline percentage is only part of the cost. Ask how the engagement letter handles:

  • The minimum fee. Many agreements set a floor that applies if the formula produces a small number.
  • What counts as the deal value. Check whether assumed debt, seller financing and earn-outs are included, and when fees on deferred payments fall due.
  • The tail provision. This covers whether you owe a fee if you sell to a buyer the advisor introduced after the engagement ends, and for how long.
  • Work-fee credits. Ask whether monthly or upfront fees are deducted from the success fee.
  • Sales tax. Ask your advisor and your accountant whether GST/HST applies to the fees.

How to read these numbers

Both sources are international. Neither breaks out Canadian fees, although Canada is one of the five countries most represented in the Firmex survey (Firmex, p. 5). Treat the figures as a starting point for negotiation, not a price list. Fees vary with a deal's complexity and risk, and those were the factors advisors in the survey rated most important when setting a fee (Firmex, p. 22).

Sources

This article is for informational purposes only and does not constitute financial, legal, or business advice. Every business sale is different. Before making decisions about valuation, pricing, or engaging an advisor, consult a qualified professional familiar with your specific situation.

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