Given current market conditions, there is no denying that the UK's national leaders have much to celebrate – at least against a backdrop of falling City profits.

As Legal Week's recently published 2002-03 financial results show, the UK's leading national firms have out-paced their City peers for the second year running.

This translates into the top 10 nationals' growing turnover by an average of 7.2%, with profits up by 4%, against a top 50 average of a 5.1% rise in turnover and a 1.1% fall in profits.

More striking are figures for partner profits. Go below Lovells' £588,000 average and you now find DLA, Walker Morris and Irwin Mitchell nestling alongside CMS Cameron McKenna and Norton Rose. So much for the good news.

Judging by fees per fee earner the signs are that lawyer productivity has barely edged upwards during the past five years, with most top 20 practices bringing in £140,000 to £200,000 per lawyer.

In short, many firms have achieved their earnings boost at the cost of further expanding already bulging ranks of salaried partners.

It is also striking how little relation income to lawyer now bears to partner profits at most national firms. Sure, DLA is staking a claim as a credible player in the London legal market, but the national giant remains no more than mid-ranked (see table) on productivity against its peers, let alone City rivals.

Likewise, sky-high profits at firms such as Walker Morris, Irwin Mitchell and Halliwell Landau, have as much to do with high leverage and bulk litigation as underlying growth. Such a reading extends in varying degrees to other national firms. While Eversheds, Pinsents and Hammonds all posted above-trend profits results, all three have been toughening the track to equity.

Notably, Hammonds' eyecatching 20% boost in profits comes after a heavy dip in 2002, while the firm concedes that a reduction in the number of equity partners by 11 during the year was a major factor behind this rise. Indeed, income per lawyer actually fell from £192,000 last year to £163,000.

It should also be pointed out that the overall headline figures mask turbulent years at some firms, notably Osborne Clarke, Shoosmiths and Morgan Cole whose dramatic fall in earnings, which is understood to touch 30%, has put the firm outside the UK top 50.

Against such a backdrop, quality (mainly) single-site firms such as Bristol's Burges Salmon, Newcastle's Dickinson Dees and Leeds' Walker Morris were among the best all-round performers.

Burges Salmon and Dickinson Dees saw fees up by 15% and 14% respectively despite their commitment to organic growth. And unlike many rivals, the pair have combined growth in income with strong rises in profits and high lawyer productivity.

Typically, such performances generate claims that the single-site strategy has been 'vindicated' but there is no clear pattern of regional success against national rivals.

Take the supposed standard bearer for this approach, Wragge & Co, which appears to be at a cross-roads as its blistering late-1990s growth subsides and the firm eases itself, somewhat awkwardly, into the London market.

Overall it must be considered a positive year for the major nationals, with Addleshaws securing the Theodore Goddard merger, DLA maintaining momentum and growth and Eversheds and Pinsents looking robust after uncertain times.

But, while the verdict on nationals is 'good', the jury is out on whether it is 'good enough'. An issue for firms such as DLA and Eversheds is whether current investments can be used to produce an upturn in underlying productivity.

It must also be remembered that such firms took a battering competing with the more cyclical, corporate-focused practices of the City in the last bull market and they will have to make up substantial ground before the next upturn.

On this reading, it is certainly fortunate that their closest band of City mid-tier rivals have been such indifferent performers in the past two years.