Perhaps the joke had nothing to do with Pepperdine law school per se? At my high school, for some reason, many of the very very rich kids wanted to go to Pepperdine for their college education. I really don't know anything about Pepperdine, but the impression at my high school was that it was for rich under-achievers who wanted a swank lifestyle while sorta going to classes.
So, maybe they were intending the joke to play off people's preconception of the entire school in general and not the law school in particular? Seems more reasonable - i mean, what person not interested in law would know *what* the reputation of Pepperdine law school is.