IBD vs lawyer fees in M&A

RE_BankerBankers work on a success fee basis, usually with pretty small work fees. So if a deal doesn't get done they will likely not even break even based on resources used. So there is a large risk factor and many times a deal falls apart and it is completely out of the bankers control.

As someone mentioned, lawyers bill by the hour. Success or not, they get paid well for the services they provide and take minimal risk.

All a small team (6-8 people) needs is one big deal or two medium deals to hit and they are likely OK for the year.

One important thing to point out is that while lawyers don't get paid solely based on the successful completion of the transaction, they often get the shaft when a deal falls through. As a lawyer, if a deal does not get completed, you can expect to absorb up to 1/3rd of your fees if your client is a PE firm. I can't say there is any logical reason behind this other than that the client holds the power.