Here's a few rules you can go by when choosing an SEO company. Avoid the following...
1) Anyone who says they can do the job for under £250 per month.
2) Anyone who ever uses the word "guarantee". They can't guarantee anything.
3) Companies that won't let you sign up for a contract shorter than 12 months. Or, that don't offer a clause that allows you to cancel after 6 months if you're not happy.
Look at the clients a company currently has. How well do they rank? How big are the company? I'd personally much rather sign up for an SEO company with 20 large clients than 300 small ones.
Failing that, get a book and learn yourself. Two great books to start are "SEO for dummies" and "The Art of SEO". you can pick them both up from Amazon for around £15 each.