Solution 1
-Exit Garry's Mod
-Go to game list
-Right click Garry's Mod and go to Properties
-Click "Set Launch Options..."
-In the field in the new window, type in "-dxlevel 90" (without perenthesis)
-Click okay
-Try again.

Solution 2
-In Garry's mod, open the console (if it doesn't open, go to your options, Keyboard, click "advanced..." and "enable developer console"
-In Console, type in "Mat_specular 1" and press enter. (Game will most likely freeze for a moment)