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I think there are at least two other obvious drawbacks that were missed. Some people are allergic to dogs/animals and some people have a fear of dogs/animals. Before I would consider a drawback of "people may spend too much time petting pooch", I would considerer health impacts as a greater drawback.
If offered two jobs, one with an office dog and one without, I'd take the office dog one -even for less pay!
What about allergies?