Whenever a spell or ability you control counters a spell, you may create a 1/1 blue Merfolk creature token.
Tap seven untapped Merfolk you control: Counter target spell.
A spell or ability counters a spell only if it specifically contains the word “counter” in its text. If a spell or ability you control causes all the targets of a spell to become illegal, that spell doesn’t resolve but is not countered.
Lullmage Mentor’s second ability will cause its first ability to trigger.
Since the second ability doesn’t have a tap symbol in its cost, you can tap creatures (including Lullmage Mentor itself) that haven’t been under your control since your most recent turn began to pay the cost.