There is an excellent topic at a WebmasterWorld thread (required paid access). The topic is named, "Am I asking for too much from SEO companies?"
In short, the thread has one person who has several sites and has, over the years, had to hand over the SEO work to SEO companies. He has been through "all the 'SEO' firms in town" and is really never happy with the outcome. He asks, is he asking too much from these SEO companies? Is he expecting too much? Can an SEO company help him at this point?
We have discussed in the past the pros and cons of bring SEO in house. Clearly, an SEO who focuses for a long time in a specific industry may have some advantages. But at what point are your sites too big for an external SEO company?
The thread doesn't really go off on the size issue. The discussion there is more about what to expect from SEO companies and how to utilize them for a network of site in your situation. Some recommend that for his situation, he should just ask a few trusted SEO companies for SEO audits and then compare those audits. Maybe hiring an SEO on a month to month basis, doesn't pay for him - or maybe it does.
Like I said, lots of good questions and discussion around the top of the value of an SEO company in the thread.
Forum discussion in the WebmasterWorld Supporters Forum.