"My client and his partners are not professionals (attny/lawyers/cpa's) if that matters, but wouldn't the ability to have an s corp own a partnership to avoid SE taxes be questionable?"

Everyone participating in the S Corp gets paid through payroll. Payroll covers Social Security and Medicare tax. SE is Social Security and Medicare tax. For SE, when you take the expense as a deduction (giving parity to an employer share), you will notice the math bases the tax on 92.35% and not the full 100% taxable income. For employees, the taxes are split evenly between employee and employer, and the employer's tax return is where the employer share is a deduction.

It's not avoidance. It's a different method for payment.