Ken:
Tough, because your description is like holding up a mirror in my face.
One of the real challenges we have, today, is that the overwhelming majority of the current generation of kids have never seen even marginally bad times, have no clue that life has legitimately bad consequences for people who make bad choices.
What to do?
Many of the "carrots" referenced above are good ideas; it is certainly not too late for your son to learn some of the consequences of bad life decisions, too.
Some have found it effective to engage in some volunteer work for those who have experienced truly hard times- preferably, in / near your community so he can recognize the hard times in context, as opposed to seeing it in (for example) Haiti, which would be someplace so foreign that it simply is not relevant.
My cousin's kid had a wake-up moment when she was assisting with some Katrina relief, seeing what happens to people who have, suddenly, nothing. Not quite the same, because she could (and ultimately, did) associate that with a sudden catastrophe, and (of course) government's fault. But it was a measure of progress.
The toughest thing is, though, that it is hard work, very very hard work for you guys, and it is work no one else can do.
Link desired things to the work done to achieve them; life does that to us, to this day. Have the strength (and it is gut-wrenching and at times, inconvenient) to follow up on the threats of consequences, with the promised consequence.
Key word: promise.
Promise to hold him to a standard. And promise to recognize the achievement thereof.
You and your wife have set up high standards of achievement, and a good way of living to go with them. If your son can simply be made to understand that what he has now, is yours, and that his participation in the fruits is temporary; he has to earn his own- then, you've gotten somewhere.
Does your wife's firm (and I apologize, I have shamefully forgotten her name and whether she is a solo, small-firm or big-dog, the latter IIRC) have a structure which would allow for occasional hard work by a bright 12-year-old? You may be surprised what value he derives from something like that, and he can see people working hard for what they do.
For that matter, maybe you can find a way to get him involved, on some level, with your stuff, maybe get him to do some research, arrange and label some photographs, put together some comparison charts on performance, specifications, costs, anything, so he is involved there.
Maybe, one of these days, he takes a good picture, gets a photo credit in print, has a modest taste of recognition earned.
When all else fails, beat him senseless. No wait, that's what we do to ourselves when we think we are failing our kids.
Lots of joking about kids, but it ain't easy, because we are playing for keeps.
Living the dream with you, pulling for you, praying for you.
All the best, /s/ Spike
Feel better now! 
