A WebmasterWorld thread has an individual that almost hired an SEO company asking himself if it is asking for trouble when hiring such an SEO company. This person's understanding or thought process is that if he hires an SEO company that sees the success his site is achieving in the search results, that ultimately, that SEO company might decide to get into the business themselves.
It is an interesting question and I have had clients and prospects ask me this exact question on the web development front. For me, the answer is, we hope that your success would lead to more work for us and we would both be successful for a profitable web venture. SEO companies, web development companies and so on - they like to specialize in what they do best - make better web sites. They don't always deal best with specific niches and dealing with customers and customer service, but they do a great job at helping those who do a great job at that build a web site that can handle it.
This member posted at WebmasterWorld saying:
I've reached a point where I am wondering if the hiring of an SEO company could easily wind up being a competitor in disguise. It took a while before the SEO company was ultimately determined to be in direct competition.
Some clients make contractors sign non-compete agreements - that is always a solution. But ultimately you need to be comfortable sharing your business's most intimate details with your contractors and if you cannot do that, then it might be hard to ask for outside help.
Forum discussion at WebmasterWorld.
