National firms are failing to turn rising partner profitability into increases in productivity, according to Legal Week research, which shows the regions' top lawyers still lagging well behind City rivals.

The results, which are drawn from Legal Week's 2003-04 UK top 50 table, show that the top 10 national firms saw profits per equity partner (PEP) increase by an average of 3.5%, compared with the top 50 average of 6%.

Breakdowns for the top 10 national practices put the group's average fee earner billing at just £145,000, underlining the use of salaried partners and a reliance on bulk work divisions at such firms.

"Fees per fee earner show a much clearer picture than PEP for this year," said one senior partner at a national firm. "The cost bases of the nationals are broadly similar, so fees per fee earner shows just how much the firm is generating, without it being obscured by different equity structures."

Indeed, despite posting the second-highest PEP figure in the national top 10, DLA's productivity is average among its peers. This is because the firm has only 113 equity partners out of a total fee earner figure of 1,904.

The highest top 10 national ranked firm for PEP is Irwin Mitchell, although its low fees per fee earner figure highlights the firm's reliance on bulk litigation work. In contrast, Pinsents tops the productivity ranks with a 2003-04 average of £166,000, despite posting a PEP of £270,000, against a profits average for leading nationals of £315,000.

Eversheds' managing partner David Gray said: "It is [a set of] very different firms that you are dealing with… but not that much difference between fees per fee earner because broadly we pay the same and we get the same out of people as we pay for."

Despite the relative stability in productivity, nationals and leading regionals saw sharply diverging performance in 2003-04 in terms of profits and fee income growth.

A number of firms such as Shoosmiths and Osborne Clarke saw rebounds in profits after previous difficult years. Meanwhile, leading commercial firms such as DLA and Burges Salmon achieved continued robust fee growth, up 17.5% and 15.5% respectively. Wragge & Co's PEP figure this year is a disappointing £210,000, a 17.5% drop, with a static below average turnover of £79.3m – making it the least profitable firm in the top 50 with a fees per fee earner rate of £144,000.

Senior partner Quentin Poole said the firm was deliberately keeping headcount higher than it needed to be for this point of the economic cycle. "We are carrying 15% spare capacity. We are managing our headcount at the partner and senior lawyer level, but not among younger lawyers, because that is where we see the future of the firm," he said.

Despite mixed performance on productivity, recent figures show that national and regional firms are taking a greater market share. The top 10 saw an average growth in fee income of 7.8%, against 4.6% for the top 50. The contrast is more striking compared with larger City firms, with magic circle firms in 2003-04 seeing a fall in income of 1.38%, while the next band of firms saw income grow by just 2.5%.

Eversheds' Gray said: "Our year was comparatively good, but it is a tough market. We need to keep working at it."