Shari Thurow posts some excellent insight on what companies should understand when working with a SEO firm. These suggestions are useful for the interactive agency community. Some of the points she makes as a result of interviewing industry SEO experts include (my comments added):

"You'll have to change your Web site. Accept this fact before contacting us."
We now include this in our contracts.

"Your site has no more right to high rankings than anyone else's, regardless of your standing in the field or your brand's renown."
Ego drives a lot of companies searching for assistance with SEO. We stay clear of companies without a realistic self-perception.

"Tell your Web developer to get with the program or get lost."
This used to be more of an issue where web developers felt threatened by SEO projects, but we speak geek well enough that it's not much of an issue. Still, in-house web dev staff or outside agency web designers need to be on-board or it won't work.

"Marketing staff: take and pass an HTML 101 class (no cheating)."
This is helpful, but providing education is part of what our clients are hiring us for.

"IT staff: take and pass a marketing and usability class (no cheating)."
IT is not always expected to see the business reasons for tasks, so it's important that they open up to that kind of education when it comes to SEO.

"Make peace with your IT department."
Same as with getting web dev staff on-board.

"We just spent six months optimizing your site. It's a little late to tell us you worked with three other SEO companies that specialize in cloaking, and that also mirror sites with identical content."
THIS is critical. Full disclosure is very important. All stakeholders in a client company need to be aware of your SEO firm engagement and ongoing, open communications must occur. Otherwise more time may be spent on "SEO spam cleanup" than on SEO itself.

If you're a company working with a SEO (search engine optimization) firm, or you're thinking of hiring one, this article, "How not to work with a SEO/SEM firm" is a must read.