Google went public on August 18, 2004, at a price ($85) that was literally underpriced from its auction clearing price. (We know this because "winning" bids were allotted 75% of what they asked for at a particular price. The clearing price would have been the price at which 100% of the bids at that price were filled.) What happened then? There was a pop, an 18% pop that is almost exactly average for first-day pops, and the shares closed at a little over $100. Then what happened? They sort of went down. By September 3, Google shares were at $100.01, lower than the closing price on opening day. Then what happened? You know what happened. Google is at $600/share now, and hit $700/share in December 2007 (those were the days).

Why do I bring this up? Because I have been fascinated with IPOs for a long time, and I have written three articles about underpricing here, here and here. Reading about the Facebook IPO, all the questions, criticisms and insights seem very familiar.  So, once and for all, I think we need to come to terms with two things, teach journalists about these two things, and then calm down about IPOs for the rest of the history of capital markets.

1. First-day pops are meaningless.  Say my house is worth $300k.  If I list it for $290k, and someone buys it and then immediately resells it for $300k, then this doesn't mean my house is worth any more than if I had originally listed it for $300k and it sold.  Or, if I listed it for $310k, and the buyer resold it for $300k.  These are all $300k houses.  In the first instance, I left some money on the table, which makes the second instance more attractive to me.  But none of these scenarios changes whether my house is worth $300k or not.

Now, some people would argue that pop creates value.  That if onlookers see someone resell my house immediately for more than she paid, they will be attracted to my house and may purchase it from the second buyer for more than $300k.  This may in fact be true, given the amount of uninformed trading associated wtih IPOs.  But, eventually the price will return to $300k.  If the pop creates value, it is created for someone other than the seller.  The argument that the seller benefits is tenuous -- the seller may reap the benefits in a follow-on offering or via "good feelings" for its retail brand.

Could the absence of a pop destroy value, even if temporarily?  Maybe.  The confusion and criticism over the Google IPO may have caused its price to struggle the first few weeks.  But then fundamental value caught up.

2. First-day pops are meaningless.  It bears to be repeated.  Studies have shown that firms with the biggest pops (60% or more) have the worst one-year returns of all issuers in that same year.  Anecdotally, we know that some firms with the largest pops (Webvan, mp3.com, VA Linux) don't even exist in the same form any more.  First-day pops are not correlated with long-term value.

So, was Facebook's IPO successful?  This all depends on what the definition of success is.  If "successful" means "had an initial offering price that rose on the first day," then no.  If "successful" means reaped the optimal amount of capital for its shares, then maybe so.  I think it's interesting to think about the Facebook IPO with the Google IPO in mind.  That IPO was considered unsuccessful by many.  There were technological glitches.  There were last-minute disclosure snafus.  It was August.  It was a slow time for technology IPOs.  At the last minute, a bunch of insiders sold their shares, too.  Rumors suggested that Google paid a very low commission to its lead underwriter.  None of these things had anything to do with the fundamental value of Google, and time bore that out.  I say let's see.

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The post-mortem on Facebook's IPO is well underway.  Who's to blame?  There's an argument for the answer "no one"--after all, if the IPO's goal is to raise money for the company, Facebook accomplished the mission by not leaving a penny on the table.  Indeed, it reached into investors' pockets and grabbed a few dollars, to boot.

From investors' perspective, however, the IPO was a bust.  The SEC and Congress are investigating.  Without further ado, in no particular order, I present the Facebook IPO theories I've run across. 

1. CFO David Ebersman. Ebersman is faulted for boosting the number of shares by 25% right before kickoff (money that, incidentally, went to investors rather than the company).  According to the WSJ Ebersman did not defer to the bankers as companies typically do. And by letting outside investors get more than half of the IPO proceeds (57% according to WaPo), Ebersman arguably did leave money--Facebook's money--on the table.

2. Morgan Stanley: Lead underwriter, its job was to price at least accurately. Instead, it kowtowed to a heavyweight client and let itself (and its reputation) get used.The WSJ also makes it sounds like Ebersman, rather than the bankers, set the final price of $38.  Normally I tell my students the company plays the role of "concerned spectator" in the final pricing decision.  Facebook was doing a whole lot more.  By the way, did you know that the underwriter discount was only 1.1%?  The underwriter's discount is the cheaper price at which the banks buy the shares from the company.  They then turn around and sell them to the general public at the IPO price.  The spread is their automatic profit, and the compensation they get for the risk of the deal and for providing price support.  Typically the spread is more like 5-7%.  Wow.  Morgan Stanley may have bungled this offering, but am I the only one that feels a little sorry for them?

3. Goldman Sachs. Always a popular villain, Goldman's sin was telling clients earlier this month that they were revising downwards their projections for Facebook's earnings.  Morgan Stanley did the same thing, but Goldman is the perennial favorite if you're going to launch an I-bank conspiracy theory.  Lawsuits have already been filed alleging selective disclosure.

4. The secondary markets.  Rich Karlgaard of Forbes: "Facebook‘s shares have been dead in the water for the last 12 months. Private investors had already bid up Facebook to a $100 billion value a year ago."

5. Zuckerberg: Christine observed months ago that Zuckerberg has almost secured paranoiac control of the company. And he couldn't be bothered to lose the hoodie. 

6. Nasdaq: Technical glitches, delays in trading, FINRA investigations.  Oh my! 

7. Timing: Rich Karlgaard again:

From Facebook’s shares debuted in a cloudy market. Beyond Europe in 2012, May is a bad time to go public. For the past several decades, nearly all of the stock market’s gains have occurred between October and May. The canard “Sell in May and go away” turns out to be true.

 If you see/have more theories, let us know in the comments.

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BERNARD M. BARUCH COLLEGE/CITY UNIVERSITY OF NEW YORK

ZICKLIN SCHOOL OF BUSINESS

DEPARTMENT OF LAW

FULL-TIME TENURE TRACK

FACULTY POSITIONS IN THE

DEPARTMENT OF LAW

Beginning Spring or Fall 2013

The Zicklin School of Business of Baruch College/CUNY invites applications for full-time tenure track positions at the Assistant and/or Associate Professor rank in the Department of Law. The Department of Law offers courses to undergraduate and graduate business students in a wide variety of business subjects. The Zicklin School of Business is accredited by the AACSB, and is among the largest Schools of Business in the nation. Baruch College is a multi-ethnic, multi-racial institution strongly committed to both teaching and research.

JOB QUALIFICATIONS

Applicants must have a JD degree from an ABA accredited law school, an excellent academic record and a demonstrated potential for outstanding scholarship and teaching in the area of business law.  Applicants with a record of scholarly publication are strongly preferred.  While the Department will consider candidates with an expertise in any field of business law, the Department’s current priorities are in the areas of securities law, banking regulation and sustainability.

JOB DESCRIPTION

Faculty members are expected to conduct high quality scholarship and publish their work in prestigious academic journals. Faculty will teach a variety of basic and advanced business law courses.  Other job responsibilities include new course development and service to the Department, School and College.  Rank is dependent on qualifications.

TO APPLY

Applicants should send a resume and a cover letter that includes a brief statement of current teaching and scholarship interests to:

            Department of Law Search Committee

c/o Ms. Latisha Lane

Baruch College/CUNY

            One Bernard Baruch Way

            Box B 9-225

            New York, NY 10010-5585

Applications may also be submitted electronically to Latisha.Lane@baruch.cuny.edu

Deadline for Receipt of Applications     September 1, 2012 

NOTE:  Baruch College is an Equal Opportunity/Affirmative Action Employer.

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Longtime readers will remember that Dain Donelson and I did a modest study of the Office of Thrift Supervision's performance during the financial crisis; I've summarized the work over at RegBlog, for those interested in a recap.

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In a comment to my Facebook IPO post, Steve Bainbridge asked: "How does the fact that Morgan Stanley had to intervene to keep the price from dropping below $38 factor into your analysis? Zuckerberg may be laughing all the way to the bank, but are the underwriters?"

Here's what I started to type in the comments: "To me it depends on how much you buy the underwriter conspiracy theory. If you think the big bad investment banks' standard playbook is to enrich their banking clients at the expense of poor powerless issuers by underpricing IPOs, then Facebook is a rare case of an issuer with the clout to set the pricing terms.   So it made sure that it (and its investors) didn't leave money on the table, and it passed on the risk of overpricing to underwriters who were, until last Friday, feeling pretty lucky just to get a seat at the IPO of the year.  

Instead, if you think the underwriters are good-faith actors that are up against big information asymmetries, then FB is a case where they just misjudged the market's appetite for FB shares.  Either way, it's interesting to me that there was such apparent mispricing when (unlike in most IPOs) there was an active secondary market in Facebook shares pre-IPO, so valuation should have been a good bit easier." 

Then I figured I was getting long-winded for the comments section!  FB, in case you missed it is now trading down 13% from its offering price. The question that's nagging at me now is, what's the deal with Morgan Stanley's book?  If you're not familiar with book-building, here's a good introduction from Forbes' Darcy Travlos:

For a “normal” IPO, a company that goes public in the normal course with little media attention, the first step is to build a strong “book” of orders for the offering.  If a company wants to sell, for example, one million shares to the public, the order book needs to exceed that one million by some multiple.  Back in the less frenzied days in less frenzied industries, having order demand exceed supply by 3-5 times was a good book.  The reason why the demand had to exceed supply was that accounts that really wanted the stock would put in inflated orders to make sure they got “filled” on what their true demand.   With this level of demand, underwriters would be confident that there would be enough demand in the after market (once the stock begins trading) to support the offering price.

 The whole description is worth a read, but the gist is that normally underwriters won't price unless they're looking at an offering that is oversubscribed by 5x or more. 

So what went wrong?  Did Morgan Stanley not have a big enough book?  Travlos speculates that "that institutions probably put in orders larger than they wanted to ensure they received IPO stock, but sold out of the offering when the stock didn’t pop.  Institutions got out at whatever profits they could lock in (the stock did trade at $42) and retail investors bought in."  Sounds plausible.  She also references the private secondary market that I've been so hung up on, noting "It brings into question institutional support, since many institutions were able to buy Facebook prior to the IPO on the private market."  

The short answer to Steve's question is, of course, that the underwriters are sobbing into their single malt scotches and trying to piece together what went wrong.  I share Steve's skepticism about Facebook's path to profit, which has an Underpants Gnome quality to it.  But, given how it has upset our expectations about the underwriters' role, this IPO may be one for the ages.

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Fitch has tried to run the numbers, and concluded that the 29 largest banks in the world will have to raise $566 billion in equity to comply with Basel III.  It will cut their return on equity a couple percentage points, and gives lie to the idea that post-crisis financial regulation is toothless.  Fitch also thinks that US banks will be hit harder by the requirements than will Asian or European ones, which will interest the political scientists.

As FT Alphaville has observed, this has economic consequences, or could, at least: "there will thus be an increase in general borrowing costs, diminished availability of credit, reduced asset liquidity, a shift to securitization and capital markets funding or migration to less regulated segments of the financial system."

Well, there could be anyway.  Your 29 largest banks, or tongue-trippingly "G-SIFIs":

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After some hiccups, Facebook shares hit the market late this morning priced at $38, the high end of their target range.  According to the WSJ's Deal Journal, "given the hype and demand the question has largely been “How big a pop is coming?” not “Will there be a pop?”  For the record, two weeks ago I asked if there'd be a pop, and I'm still wondering. 

Facebook shares opened at  $42.05 and "then instantaneously hit $42.99, up 13% from its IPO pricing."  But when I left for lunch shares were trading at a meager $39 and some change--more a bump than a pop.  Now (1:30 EST) they're around $40, and they may well end up by close of business.  Still, early reports characterize the IPO as "more whimper than bang", "fizzling", and "cool."  Underwriters have reportedly been buying to prop up the price.  

I observed regarding the Carlyle IPO "No first day pop means you didn't leave any money on the table. And that's a good thing, right?  But that's not how it's playing in the press."  A similar story seems to be unfolding with Facebook.  Which leaves me with these unconnected thoughts:

1. Facebook's shares traded heavily on the private secondary markets, about which I've had much to say.  Given those trades, there's more information about what Facebook shares are actually worth.  Ergo, more accurate pricing.  Ergo, less pop.

2. To the extent that the conventional wisdom is that the first-day pop is about branding, name recognition, and reputation building--um, Facebook doesn't need that.  This IPO has dominated the business news.  Facebook is the highest valued U.S. company ever at IPO, its $104 billion valuation dwarfing UPS's $60 billion in 1999.  Pop, schmop.

3. There were some investors that were too late to the SharesPost/SecondMarket party.  The last private auction sold Facebook at $44/share.  Those buyers would have been better off waiting for the public sale with the rest of us.  How unhappy are they?  And...will they sue?

4. Zuckerberg, Goldman Sachs, and the other early investors who are cashing out don't really give a damn about a first day pop.  So what if the IPO investors don't see an immediate return?  Zuckerberg & Co. maximized their first-day take by pricing the shares accurately, and they're laughing all the way to the bank.

Update:  FB closed up 23 cents. So no pop to speak of. 

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“Insurance and Consumer Protection”

2013 AALS Annual Meeting

January 4-7, 2013

New Orleans, Louisiana

The AALS Section on Insurance Law will hold a program on Insurance and Consumer Protection during the AALS 2013 Annual Meeting in New Orleans. The program is scheduled for Sunday, January 6, 2013, from 10:30 AM to 12:15 PM. The program will feature a panel of leading research on consumer protection and insurance markets. Panelists scheduled to participate include: Shawn Cole (Harvard Business School), Kyle Logue (University of Michigan Law School), and Lauren Willis (Loyola Law School Los Angeles). We are looking to add one additional panelist through this Call for Papers.

Submissions: To be considered, a draft paper or proposal must be submitted by email to Joshua C. Teitelbaum, Program Chair, at jct48@law.georgetown.edu. A proposal must be comprehensive enough to allow for a meaningful evaluation of the proposed paper. Submissions must be in PDF format.

Deadline: The deadline for submissions is Tuesday, September 4, 2012. Decisions will be announced by Friday, September 28, 2012.

Eligibility: Full-time faculty members of AALS member law schools are eligible to submit. Faculty at fee-paid law schools; foreign, visiting and adjunct faculty members; graduate students; fellows; and non-law school faculty are not eligible to submit. Papers may already be accepted for publication, provided that the paper will not be published before the AALS meeting.

Expenses: The panelist selected through this Call for Papers will be responsible for paying his or her own annual meeting registration fee and travel expenses.

Inquiries: Inquiries about this Call for Papers may be submitted to Joshua C. Teitelbaum, Georgetown University Law Center, jct48@law.georgetown.edu, (202) 661-6589.

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The $2 billion trading loss is different from your average financial catastrophe, particularly in journalist terms, because journalists were writing about the possibility two months ago.  They called it! How often do they get to say that?  I smell Loeb awards!  Anyway, if you haven't seen them, here's three interesting takes on the trading loss:

• Closest to home, Glom friend Kim Krawiec reacts to Jonathan Macey's "it's no big deal" op-ed.
• Felix Salmon is certainly on the side of the "silly traders, why are they in banks?" crowd.
• Heidi Moore has the explainer students are going to want to read.

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So, if you are one of approximately nine people in the country that hasn't seen The Avengers yet, you should probably go ahead and go.  (And remember, stay until the end of the credits.)  I have seen it twice.  Once in 3D.

So, I have to admit that my son and I went on a mission to meet all of the prerequisites for the movie.  We have seen Iron Man, Iron Man 2, Incredible Hulk, Thor and Captain America.  Our favorite was definitely Captain America.  But, I have to say that the movies all point toward this summer's blockbuster, interweaving characters and subplots in a nice way.  So, we were excited to see The Avengers, and it did not disappoint.  And, if you haven't seen the prerequisites, you probably aren't too lost.  There's enough brief exposition to get everyone up to speed enough to enjoy the film for what it is, and enough esoteric references to affirm the comic book nerds who know all the backstories.

The main plot actually comes from probably the weakest of the prior movies, Thor.  Thor's evil stepbrother, Loki, has regrouped since he was last banished and come under the tutelage of an even more evil villain in the "other realm," a realm that includes Asgard, Thor's home country.  At the same time, S.H.I.E.L.D. has uncovered "the Tesseract," the strange 4-dimensional blue cube that gives off magical energy, which was stolen by the Red Skull in Captain America and buried with Steve Rogers at the end of the movie.  The Tesseract originally came from Asgard, and Loki has promised it to these evil Chitauri folks.  Once Loki has the Tesseract, then Direct Nick Fury must assemble the Avengers, Iron Man, Hulk and Captain America.  Though not called by Fury, Thor returns to Earth to deal with Loki and so becomes the fourth Avenger.  Black Widow and Hawkeye are sort of "hero support" for the avengers, not having super powers themselves, but having "a specific set of skills" that make them very useful.  Once the Avengers are assembled, they of course first fight each other before learning how to fight together and save the world.

At least one reviewer has tried to say that The Avengers is really about 9/11, but as commenters pointed out, the analogy was stretched a bit too thin by the reviewer's inaccurate depiction of the facts of the movie.  Yes, there is a big, tall building in Manhattan that is the scene of the final battle.  Stark's office tower, which he made self-powering via his "arc reactor."  However, Stark Tower, which is located in Midtown, predates 9/11 as a fixture of the comic book series, and more likely stands for Tony Stark's ego.  At the beginning of the movie, we see him very proud of his building, telling his better half Pepper Potts that she can take "12% of the credit."  Later, Captain America, who is often pointing out Stark's self-absorption, describes the building as ugly.  The battle takes place around the building, but the fighting isn't really directed toward the building as there Loki has placed the Tesseract to "open the portal" to the other realm so the Chitauri can cross over.  To close the portal, Stark has to sacrifice himself, overcoming his own ego to become part of a team.  More generally, the movie draws on patriotism as a theme, alluding to various times of turmoil, including Captain America's WWII, and rallying symbols such as the stars and stripes.

Besides the non-stop action, the dialogue is great, mostly everything that comes out of Robert Downey Jr.'s mouth.  (And, some of which you can only catch the second time -- including his calling Thor "Point Break.")  And then of course the sentimental favorites that send chills up your spine, like the lone German who refuses to bow to Loki saying, "There have always been men like you."

A few things were surprising.  First, the producers had to turn Agent Coulson into a likeable character, the Dobby of the Avengers, if you will.  But, in the prequels, Coulson is first portrayed as the cold evil of faceless government intervention.  The Marvel folks tried to loosen up his persona in a few "shorts" on the DVDs, but they lay it on thick in the movie.  We learn that Coulson is pining for a cross-country girlfriend and collects Captain America trading cards.  Pepper has befriended him and wants to solve his romantic woes.  This becomes necessary for what comes next, which I'm sure you can figure out.

Also, my two boys (who saw the movie separately), both independently announced to me that they wanted to be Hawkeye for Hallowe'en.  Hawkeye?  Why?  I have no idea.  He does have bows and arrows (and his quiver has to hold about 2000 arrows, by my count).  But he has no superpowers.  Maybe he's accessible.  Who knows?

So, what are the movie's flaws?  As my 12-year-old girl pointed out, Black Widow is a token player in the movie.  During a movie season that brings us Katniss Everdeen, this seems a little behind the times.  And, the only other woman is Agent Maria Hill, a S.H.I.E.L.D. agent who doesn't do much but who was given a soldier's "catsuit" uniform.  I'm not sure why female agents in the shadow agency aren't issued ordinary clothing to wear.  Agent Coulson just wears a suit.  Director Fury does wear his long, leather coat whether he's on the base 20 stories underground or on the base 35,000 feet in the air.  I guess he just gets chilly.  Anyway, women get short-shrift here, but I assume this topic has come up in the comic book world before.

And the weirdest thing is that it would be as easy to compare The Avengers to The Hunger Games as to 9/11 revenge fantasy.  Both movies have amazing archers.  Both movies have something called "tesseract/tesserae"), which both seem like something you sell your soul for.  And, both movies (at least for awhile) have a strangely-clothed "Gamemaker" who is manipulating powerful young people into fighting each other.  Weird.

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What traders do is regulated, and will only get more regulated upon the implementation of Dodd-Frank. But what they do isn't the heart of financial regulation, which doesn't so much scrutinize individual trades (a generalization, to be sure), as attempt to put into place institutional arrangments that ensure that the financial system will survive one or a few trades going south.  For lawyers, in other words, the talking points in the wake of JPMorgan's $2 billion trading loss aren't obvious.  Here is an attempt at three:

• When traders blow up a bank, the bosses get fired.  The Chief Investment Officer just got canned from JPMorgan - she was the fourth highest paid person at the firm last year.  But the London Whale wasn't.  Regardles of who was precisely responsible for the bank's loss, you get a sense that banks internally sanction risk managers, rather than profitable traders, when the traders make a mistake.  In this case, that could be because the paper losses could yet come good.  Or it could be a reason to regulate - if it is the risk managers who will get it in the neck, maybe outsiders need to sanction the traders.
• The conventional - and pretty attractive - response to these sorts of messes is to try to make regulation simple.  Smaller banks, Volcker and Glass-Steagal-like rules ... the idea is that you couldn't possibly regulate whether JPMorgan's hedge was a safe one or a risky one, so you need to make it so the trade just couldn't threaten the financial system.  I'm quite persuaded, but I actually wonder whether big, diversified banks or small interconnected ones get bailed out more often by the government.  If you know, or have some other talking points, by all means offer them in the comments.
• Dodd-Frank is on the job, but unruffled:  "The Financial Stability Oversight Council, the committee set up in the wake of the crisis to identify and respond to threats to the banking sector, is not planning a special meeting to discuss JPMorgan," the Times tells us.  But the implication is that they could do exactly that, which in turn suggests that the emergency committee is the exception to the rules on reporting, netting, clearing, margin, &c.  It is the part of financial regulation that can respond to individual trades.

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Thank you to all of the permanent Glom bloggers for sharing your platform with me over these past two weeks.  And thank you to all of the commenters who engaged my posts.

I thoroughly enjoyed my first guest blogging experience and gained new respect for professors who blog regularly. 

Thanks again for the opportunity and the experience. 

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There is still so much about benefit corporations (and social enterprise in general) that could be written about.  I was only able to scratch the surface during my short guest blogging stint, but I will continue to explore the issues in an article I am currently writing for American University’s Business Law Review.  I will provide the Glom with an SSRN-link when I post the article.  

Also, on Saturday, October 6, 2012, our main law review here at Regent University School of Law is hosting a symposium on social enterprise.  The symposium will be held on our beautiful campus in Virginia Beach, VA (pictured below).  We already have an impressive group confirmed (listed below) and plan to add one or two additional speakers. 

• Cass Brewer (Georgia State Law)
• Bill Callison (partner, Faegre Baker Daniels)
• Joan Heminway (Tennessee Law)
• Lyman Johnson (Washington & Lee Law)
• Michael Pirron (CEO of Impact Makers, a founding certified B Corporation in Virginia)
• Dana Brakman Reiser (Brooklyn Law)
• Kyle Westaway (founder of Westaway Law and co-founder of social enterprise Biographe)

Each of our guests brings a unique perspective and an incredible amount of knowledge to the symposium.  I linked to their profiles because I would have to do 7 separate posts to even touch on all of their many accomplishments.  Two or three Regent law professors (including me) will moderate and contribute.

We at Regent University School of Law are incredibly excited about the upcoming symposium (even if it is still months away) and hope some of the readers will join us.  I will provide more information about the symposium to the permanent Glom bloggers when we get closer to the date.

Feel free to e-mail our excellent symposium editor Rachel Bauer at symposium[at]regent.edu if you would like more information.

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Since landing a tenure track law professor job (which started this past August) numerous practicing attorneys have asked me how I broke into the academy.  All you have to do is browse the Entry Level Hiring Data collected by Professor Sarah Lawsky (UC-Irvine) to realize how incredibly difficult it is to break into the legal academy.  In fact, I almost never tried because of the steep uphill climb I knew I would face.

Rather than describe all the details of my journey into the academy, I want to focus on some of the people who made it possible.  People I consider mentors.  People I could have never broken into the academy without. 

First, I want to thank my Lord and Savior Jesus Christ.  I hesitate to write that because I am a laughably poor example of Christ’s love and because I know the many images that might be attached to that statement for readers.  But any description of my journey would be woefully incomplete without acknowledging Christ, placing Him first and giving Him the credit.

Second, my parents were my first mentors, gave me the opportunity to receive an excellent education and are still the first people (along with my wonderful wife) who I go to for advice.

Third, and the focus for this post, are the various professors who provided assistance. I would advise anyone trying to break into the academy to seek out professors to provide advice and be mentors.  I would not have landed a job in the academy without the advice and assistance I received.  In my case, as you will see, it took the assistance of quite a few people. 

My journey to the academy began when Dr. Cheryl Jester George and Professor Basil Mattingly chose me, then a 3^rd year law student, to teach, throughout the year, a series of property law classes in the school’s Academic Enrichment Program.  I loved it and briefly thought about trying to become a law professor before quashing the thought as unrealistic.

The desire to enter the academy arose again while I was a corporate associate at King & Spalding in Atlanta.  I thought clerking for the Delaware Court of Chancery, arguably the most influential court in corporate law, would be among the experiences I would most want my corporate law professor to have.  Fortunately, I was able to secure a clerkship for former-Vice Chancellor Stephen Lamb on that court.  At that point, I still thought becoming a professor was a pipe dream, but I called Professor Colin Crawford, then at Georgia State, and asked him if I could accompany him to Rio de Janeiro, Brazil and help with the law school’s study abroad program before I left for my clerkship.  Thankfully, he said yes.  I am not sure how much I helped, but the trip was well worth it for me, in large part because I met Professor Joan Heminway.  Joan quickly became a valued friend and mentor.  Over the four years I have known her, she has always generously provided excellent advice.  Joan is also now my SEALS mentor.  

After my clerkship, I moved to New York City to work for Weil Gotshal.  While I was still at Weil, I met my wife and professors Marjorie Fine Knowles, Anne Tucker, and Nancy Mansfield worked to cobble together a Visiting Assistant Professor position for me at Georgia State University College of Law (and a part-time instructor position at the Robinson College of Business).   Marjorie had been a favorite professor of mine in law school, but, at the time, I had not yet met Anne and Nancy.  All three of them spent their valuable time, along with Deans Steven Kaminshine and Roy Sobelson to make a unique position for me.   

At Georgia State, I had a wonderful experience teaching courses alongside (and learning from) Marjorie and Professor Jack Williams in the College of Law and teaching my own courses in the College of Business. All members of Georgia State's law faculty made me feel welcome and Marjorie, Anne, Jack, Steve, Roy, Dean Kelly Cahill Timmons, and Professors Anne Emanuel, Jessica Gabel, Wendy Hensel, Paul Lombardo, Chuck Marvin, Mary Radford and Jonathan Todres, gave me invaluable advice about the “meat market,” research and breaking into the academy. 

While searching for an academic job, I also pestered Matt Festa (South Texas), Katheleen Guzman (Oklahoma), Kevin Lee (Campbell), Emily Hammond Meazell (Oklahoma), Lucas Osborn (Campbell), Ellen Podgor (Stetson), Paul Regan (Widener), Usha Rodrigues (Georgia), Joe Thai (Oklahoma), J.W. Verret (George Mason) and all of the previously mentioned professors, for advice.  

Now that I have finished my first year as a tenure track professor, I see more clearly how busy each of these professors must have been and the incredible gift they gave me in their time.

Even though I have now broken into the academy, I recognize that I still need to seek out mentors for what lies ahead in my academic journey.  Outside of Regent, countless professors have provided advice on course planning and research. I have found members of the academy incredibly kind and helpful.  At Regent, every faculty member has stepped up to mentor me.  I mean it.  I started listing names and realized I would have to list the entire faculty.  Some of my favorite time now (and I love every bit of my job – even faculty meetings and grading) is spent simply listening to the wisdom shared by other professors.  I even serve Professor Scott Pryor tea on afternoons that he gives me advice (rookie hazing that I hope to never outgrow).  I know Regent sometimes gets a bad rap in the academy because we are a (non-denominational) Christian law school, but I wish everyone could meet the incredible people I have the pleasure of working with here, under the masterful, but humble leadership of Dean Jeff Brauch.

Tomorrow, I am driving 8-hours (4-up and 4-back) to Washington & Lee’s law school for the opportunity to meet with Professors Lyman Johnson and Sam Calhoun.  My wife thinks I am crazy for making the trip, but I know the professors' wisdom and advice is priceless. 

It is unlikely that I will ever be able to repay the people mentioned in this post, but I hope they all know how valuable their assistance was/is to me and I hope to pay it forward. 

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Near my hometown, there was a ranch that covered 3 million acres called the "XIT Ranch."  The myth (which seems to be wrong) was that the cattle brand "XIT" stood for "Ten in Texas."  The story stuck, and the term "Ten in Texas" has been used for any number of things.  Maybe because it's just catchy.  Ten is a nice round number.  So maybe that's why in February Gov. Rick Perry challenged each of the Texas universities to come up with a university degree that costs $10,000.  Not per year, total.  A number that is, in fact, 1/4 to a 1/3 of what Texas university degrees cost now, without room and board (Texas costs $41,168 without room and board).

So, Texas universities are now rolling out their $10,000 plans.  Most of these have a common theme:  get the bulk of your degree somewhere else.  (Sort of like that joke, "How do you get a million dollars?  First, start with two million dollars.")  The plans fall into two categories:  the high school/university combo or the community college/university combo..  The first type of plan requires students to take college-level courses during high school, probably at a community college, then finish at a particular campus.   The Texas A&M plans like this so far require students to finish at A&M -- Commerce or A&M San Antonio, and can choose from a small number of majors.  The University of Texas system has delivered a proposal at on of its campuses, UT - Permian Basin, the Texas Science Scholars Program, which enrolls a small number of students who are able to test out of a chunk of math and science and go on a limited number of STEM majors.  The students must maintain a 3.0 in these courses.  The degree costs more than the $2500 a year, but is subsidized by enrolling more students at UT-Permian Basin paying the full cost.  In other words, it's not really a $10,000 degree, it's a scholarship program.

My own university, Texas Tech, is finalizing a plan that would require applicants to have finished 80 hours at a community college, then 40 hours at Tech. 

So, I wouldn't say that any Texas university has created a $10,000 degree.  They have created limited programs to award the final 1/3 to 1/2 of a degree, or they have created small scholarship programs subsidized internally.  None of these are bad ideas, of course, and they are based on what already happens.  Texas students have been taking cheaper courses at community colleges and transferring since forever, and Texas universities have been admitting students on scholarships forever.  (I had the $0 degree.)  And, students have been going to non-flagship campuses, which are cheaper, for a long time.  So these new programs aren't really going to change the cost of a Texas degree much at all, and they aren't going to change the face of university education any time soon. 

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