If they are state-mandated IOLTAs for which the interest is paid to a state agency or state-designated non-profit that funds legal services for indigent folks, they may have a NOW account. Otherwise, they aren't technically an IOLTA.
A law firm theoretically can have an interest-bearing demand deposit account (if you offer them), but state ethics laws or rules may not allow them to earn interest on clients' funds.
John S. Burnett
Fighting for Compliance since 1976
Bankers' Threads User #8