Anecdotal data point: I work at one. We've capped both the number of clients and the number of employees at around 12. I work 18 hours a week, so does the founder. The most anyone works is 35, but they're the exception, and the next "raise" they get will be the same amount of money but less hours.

We've been a going concern for 4 years now, so there's still time for things to go off the rails; but for the moment we're killing our competition and there's essentially zero internal strife.

To keep the caps we're starting to divide like a bacterium - fostering other companies around our model instead of growing ourselves. We'll see how that goes. It's a little alarming to realize that we're creating our own competition, but there's precedent for it going well (e.g. Anchor Brewing in San Francisco).

It's a great way to make money, and I spend all the other productive hours of my week on my efforts to change the world. There's lots of blue-ocean ways to do that when the need to monetize takes a back seat.