Lehman fee scale: The Lehman formula is a tiered success-fee structure used by brokers and advisors selling a business, charging a higher percentage on the first increment of sale price and a declining percentage on each higher increment.
How the scale works
The classic Lehman scale charges 5 percent on the first million dollars of sale price, 4 percent on the second, 3 percent on the third, 2 percent on the fourth, and 1 percent on everything above. Because deal values rose over time, many advisors now use a Double Lehman (10, 8, 6, 4, then 2 percent) or other modified versions. The point of the tiering is that the percentage falls as the price climbs, so large deals do not pay the same rate as small ones.
What it means for a seller
Lehman-style fees are a real cost of a brokered sale, and on a mid-sized deal they add up to a meaningful share of proceeds. Always confirm the exact scale, any minimum fee, and whether a retainer applies before signing. In a direct sale to an operator-buyer that buys as a principal, there is no success fee to the seller at all, which is one of the clearest economic differences between the two paths.
Frequently asked questions
What is the Lehman formula?
It is a tiered success-fee scale: a higher percentage on the first dollars of sale price and a declining percentage on each higher tier. The classic version is 5, 4, 3, 2, then 1 percent; modern Double Lehman is 10, 8, 6, 4, then 2 percent.
What is a Double Lehman fee?
Double Lehman doubles the classic scale to 10 percent on the first million, 8 on the second, 6 on the third, 4 on the fourth, and 2 percent above. Advisors adopted it as deal sizes grew and the original scale produced fees they considered too low.
Do I pay a Lehman fee if I sell directly?
No. Lehman-style fees are success fees charged by intermediaries like brokers and advisors. Selling directly to an operator-buyer that acquires as a principal carries no such fee to the seller.
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