Large PPC account management - in-house or outsourcing?

Here are few questions for those who manage big (30k+ keywords) PPC accounts (GaryTheScubaGuy, I will appreciate your input)

1. Do you think it makes sense to hire SEM company to manage PPC campaigns or it is better to hire few people and do this job in-house?

2. Do you believe that SEM companies have better strategy, more knowledge (based on claimed connections with Google reps), use better tools to achieve lower cost and higher CTR and ROI?

3. What is the typical fee schedule for this kind of service? Is it based on hourly rate and time spent, or more as a percentage of ad budget?

Thanks in advance for sharing your experience.