FORM 4 Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP OF SECURITIES Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934, Section 17(a) of the Public Utility Holding Company Act of 1935 or Section 30(h) of the Investment Company Act of 1940

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(Print or Type Responses)

1. Name and Address of Reporting Person * GALLAGHER J PATRICK JR   2. Issuer Name and Ticker or Trading Symbol GALLAGHER ARTHUR J & CO [AJG] 5. Relationship of Reporting Person(s) to Issuer (Check all applicable) __X__ Director _____ 10% Owner __X__ Officer (give title below) _____ Other (specify below) President & CEO (Last) (First) (Middle) ARTHUR J. GALLAGHER & CO., TWO PIERCE PLACE 3. Date of Earliest Transaction (Month/Day/Year) 08/11/2008 (Street) ITASCA, IL 60143 4. If Amendment, Date Original Filed(Month/Day/Year) 6. Individual or Joint/Group Filing(Check Applicable Line) _X_ Form filed by One Reporting Person ___ Form filed by More than One Reporting Person (City) (State) (Zip) Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned

1.Title of Security (Instr. 3) 2. Transaction Date (Month/Day/Year) 2A. Deemed Execution Date, if any (Month/Day/Year) 3. Transaction Code (Instr. 8) 4. Securities Acquired (A) or Disposed of (D) (Instr. 3, 4 and 5) 5. Amount of Securities Beneficially Owned Following Reported Transaction(s) (Instr. 3 and 4) 6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4) 7. Nature of Indirect Beneficial Ownership (Instr. 4) Code V Amount (A) or (D) Price Common Stock 08/12/2008   M   12,000 A $ 9.25 161,578 D   Common Stock 08/12/2008   S   12,000 D $ 26.4061 149,578 D   Common Stock 06/12/2008   G V 300 D $ 0 99,789 I by Spouse (1) Common Stock 08/11/2008   J(2)   2,376 A $ 25.8597 176,426 I by Trust Common Stock               150,000 I by Corporation Common Stock               96,490 I by Trust 2 Common Stock (restricted)               7,699 D

Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.
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Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned
(e.g., puts, calls, warrants, options, convertible securities)

1. Title of Derivative Security (Instr. 3)	2. Conversion or Exercise Price of Derivative Security	3. Transaction Date (Month/Day/Year)	3A. Deemed Execution Date, if any (Month/Day/Year)	4. Transaction Code (Instr. 8)		5. Number of Derivative Securities Acquired (A) or Disposed of (D) (Instr. 3, 4, and 5)		6. Date Exercisable and Expiration Date (Month/Day/Year)		7. Title and Amount of Underlying Securities (Instr. 3 and 4)		8. Price of Derivative Security (Instr. 5)	9. Number of Derivative Securities Beneficially Owned Following Reported Transaction(s) (Instr. 4)	10. Ownership Form of Derivative Security: Direct (D) or Indirect (I) (Instr. 4)	11. Nature of Indirect Beneficial Ownership (Instr. 4)
				Code	V	(A)	(D)	Date Exercisable	Expiration Date	Title	Amount or Number of Shares
Non-Qualified Stock Option (right to buy)	$ 9.25	08/12/2008		M			12,000	(3)	08/30/2008	Common Stock	12,000	$ 0	0	D
Non-Qualified Stock Option (right to buy)	$ 18.5							(3)	06/20/2010	Common Stock	27,000		27,000	D
Non-Qualified Stock Option (right to buy)	$ 22.7							(3)	07/21/2012	Common Stock	25,000		25,000	D
Non-Qualified Stock Option (right to buy)	$ 23.76							(4)	03/05/2018	Common Stock	17,762		17,762	D
Non-Qualified Stock Option (right to buy)	$ 24.9							01/01/2004(3)	07/16/2013	Common Stock	50,000		50,000	D
Non-Qualified Stock Option (right to buy)	$ 26.5							(3)	07/19/2011	Common Stock	25,000		25,000	D
Non-Qualified Stock Option (right to buy)	$ 27.03							(3)	05/15/2016	Common Stock	25,897		25,897	D
Non-Qualified Stock Option (right to buy)	$ 27.1							(3)	05/16/2015	Common Stock	18,450		18,450	D
Non-Qualified Stock Option (right to buy)	$ 27.25							(3)	07/20/2015	Common Stock	50,000		50,000	D
Non-Qualified Stock Option (right to buy)	$ 28.65							(4)	05/15/2017	Common Stock	16,667		16,667	D
Non-Qualified Stock Option (right to buy)	$ 29.42							(3)	07/21/2014	Common Stock	50,000		50,000	D
Non-Qualified Stock Option (right to buy)	$ 33.28							01/01/2005(3)	03/31/2014	Common Stock	15,024		15,024	D

Reporting Owners

Reporting Owner Name / Address	Relationships
	Director	10% Owner	Officer	Other
GALLAGHER J PATRICK JR ARTHUR J. GALLAGHER & CO. TWO PIERCE PLACE ITASCA, IL 60143	X		President & CEO

Signatures

J. Patrick Gallagher, Jr.		08/13/2008
**Signature of Reporting Person		Date

Explanation of Responses:

*	If the form is filed by more than one reporting person, see Instruction 4(b)(v).
**	Intentional misstatements or omissions of facts constitute Federal Criminal Violations. See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).
(1)	Shares held in revocable trust of which my spouse is sole Trustee and as to which I disclaim beneficial ownership.
(2)	Dividend reinvestment pursuant to the Arthur J. Gallagher & Co. Deferred Equity Participation Plan.
(3)	The stock option becomes exercisable 10% each year, commencing January 1 after the date of grant.
(4)	The stock option becomes exercisable 20% each year on the anniversary of the grant date.
Remarks: The directly owned common stock holdings reflected in Table I of this form include shares purchased through Arthur J. Gallagher & Co.'s Employee Stock Purchase Plan, which satisfies the exemption requirements of Rule 16b-3.

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