I don't agree with the complaining lawyer that this was a clear violation of the Establishment Clause. I don't think the Supreme Court's decisions on this general subject show that. The notion that a reasonable person would likely consider this small, simple, kind gesture an official endorsement of Christianity by the state of Arkansas stretches credibility past the breaking point.
The university's lawyer seems to have taken the safe and easy way out by recommending abject surrender. She might lose her nice job if she ended up costing the university money, while no one can harm her for caving in. Or so she probably thinks. Maybe some of the alums who are chipping in money for that football program should make clear to her and to the university that if they don't show some backbone, they won't be giving any more money.