Solo attorneys need separate accounts for separate jobs: an operating account for firm money and an IOLTA at a state-approved institution for client funds. Your operating account holds firm income and pays firm expenses. Your IOLTA (Interest on Lawyers' Trust Accounts) holds client money, including retainers, settlement proceeds, and filing fee advances, and it has to sit at a financial institution your state IOLTA program has specifically approved.

This page explains how to build that stack, why Novo can work as the operating account, and what to look for in the IOLTA-approved bank you pair it with.

What do solo practice lawyers need from a business bank?

The requirements list is short but strict.

A clean separation between operating and trust funds. Every state bar's ethics rules, modeled on ABA Model Rule 1.15, prohibit commingling client funds with firm funds.

That rule shapes your entire banking setup. Your operating account and your IOLTA cannot be the same account. Some traditional banks can hold both if they are state-approved for IOLTA, but many solo lawyers use Novo for operating funds and a separate state-approved bank for IOLTA funds.

Transaction data that exports cleanly to QuickBooks or Xero. Solo practice means you are the bookkeeper. If your bank's CSV export needs manual cleanup every month, you'll either give up on books or pay someone else to fix them at tax time. Look for a direct feed into your accounting software.

Integrations with legal practice management and payment tools. Retainer billing usually runs through Clio, MyCase, or a payment processor like Stripe or LawPay. The fewer manual re-entries between "client paid" and "recorded in books," the fewer trust accounting errors you'll make.

No monthly fees and no minimum balance. A slow month is not the time to be paying $15 for the privilege of keeping the account open. An account with no monthly fee and no minimum balance takes one recurring cost out of monthly cash-flow planning.

ACH and wire capability for real firm operations. Settlement disbursements go out by wire or ACH. Vendor payments to court reporters, expert witnesses, and medical records companies go out the same way.

You want visibility into pricing before you need to send money urgently.

What should solo lawyers know about IOLTA and trust accounts before choosing a bank?

If you take client money in advance, including retainers, filing fee advances, or settlement checks pending disbursement, you need an IOLTA. There is no workaround.

Here's how IOLTA works in practice:

1. Client funds go into the IOLTA, which is a pooled trust account.
2. Interest earned on the pooled account is swept by the bank and remitted to the state IOLTA program, which uses it to fund civil legal aid.

1. The lawyer never earns interest on client money. The client usually does not earn interest either, because the amounts and holding periods are too small to justify individual interest-bearing accounts.
2. You track each client's balance internally through a subsidiary ledger, so at any moment you know exactly how much of the pooled account belongs to each client.

IOLTA funds must be held at a financial institution approved by the lawyer's state IOLTA program or equivalent state authority.

Novo does not offer IOLTA accounts, so solo lawyers pair Novo with a state-approved bank that participates in their state's IOLTA program. IOLTA participation requires state-by-state regulatory relationships that most modern operating-account providers don't maintain.

Solo lawyers commonly use two accounts: an operating account for earned firm funds and a separate IOLTA at a state-approved bank for client funds. You transfer earned fees from IOLTA to operating only after the work is done and you've issued an invoice. You never pay firm expenses directly out of IOLTA.

How should solo practice lawyers evaluate business banks?

We weighed six factors that matter specifically for a solo law practice, not for retail or consulting businesses.

Monthly fees and minimum balance. Every dollar in fees is a dollar off the top of a solo P&L. The best operating account for a solo lawyer charges no monthly fee and requires no minimum balance.

Accounting and legal software integrations. QuickBooks or Xero for books. Stripe or LawPay for retainer payments. Clio or MyCase for practice management. The more of these that sync automatically, the less you touch a spreadsheet.

Wire and ACH pricing. Outgoing wires matter when you're disbursing a settlement. Free incoming wires matter when a co-counsel or client is sending you a large payment.

FDIC coverage. Deposits should be insured through a partner bank you can name.

Cash deposit access. Some solo lawyers occasionally take cash retainers. If you do, you need a bank that accepts cash. Novo does not accept cash deposits, so a cash-heavy practice would need to pair Novo with a bank that does.

Entity eligibility. Sole proprietor, LLC, PLLC, or PC: the provider has to accept your structure. Some restrict sole props; others accept them freely.

How do solo lawyers use Novo as their operating account?

Novo can work well as a solo attorney's operating account because it has $0 monthly fees, no minimum balance requirement, and bookkeeping integrations. It does not replace an IOLTA account.

No monthly fees, no minimum balance. Novo charges $0 monthly fees, has no minimum balance requirement, and integrates with QuickBooks and Stripe for bookkeeping and payments. For a solo practice with variable monthly revenue, that means the operating account never becomes a cost center.

Novo Reserves for tax and compliance planning. Reserves are labeled sub-buckets inside your checking account. Solo lawyers use them for quarterly estimated federal and state taxes, bar dues, CLE registration fees, and malpractice insurance renewals. When the quarterly tax deadline hits, the money is already set aside.

Free incoming wires and invoicing. If opposing counsel wires you a settlement, or a client pays a large retainer by wire, incoming wires are free at Novo. You can send invoices directly from the Novo dashboard without a separate billing tool.

Integrations with the tools you already use. Novo integrates with QuickBooks and Stripe. Check Novo's integrations page for current Xero and Clio status before you commit, because integration lists change.

The honest tradeoffs. Novo does not offer IOLTA accounts. Novo does not accept cash deposits. If your practice accepts cash retainers, Novo will not be enough on its own. You'll pair it with a state-approved IOLTA bank for the trust side.

How Novo compares to traditional business banks for solo lawyers

When evaluating operating accounts, the useful comparison is between a Novo operating account paired with a dedicated IOLTA bank versus keeping both operating and trust banking at a traditional bank.

State-approved community banks. These are your IOLTA options in most states. They handle trust accounting competently and their tellers know what IOLTA means. On the operating side, they typically charge monthly fees unless balance or activity requirements are met, and they often offer weak or no direct integrations with QuickBooks or Clio. They may work well for IOLTA, but their operating accounts can include monthly fees, balance requirements, and fewer direct software integrations.

Big banks (Chase, Bank of America, Wells Fargo). Most offer IOLTA in most states. They require in-branch setup for trust accounts, which is a half-day of your time. Operating account fees at big banks are usually waived only if you keep a minimum balance in the low thousands. Integration with QuickBooks exists but is generic, not tailored to legal workflows.

LawPay- or Clio-integrated traditional banks. These lean into trust accounting workflows and typically offer three-way reconciliation features solo lawyers appreciate. Operating-side pricing tends to be higher because you're paying for the legal-specific feature set.

Where Novo fits. Novo is the operating account. It has $0 monthly fees, no minimum balance requirement, and integrations with QuickBooks and Stripe. Pair it with a state-approved IOLTA bank, often the small community bank down the street, and you get modern operating banking plus compliant trust banking, without paying big-bank fees on the operating side.

How do you set up a solo law practice banking stack?

Here's the sequence, in order.

1. Form the entity and get an EIN. Entity rules for lawyers vary by state, so confirm whether your state allows sole proprietorships, LLCs, PLLCs, PCs, or professional corporations. Separating your firm's finances into a dedicated business bank account is a standard SBA recommendation for liability protection.

Once formed, get your EIN from the IRS online for free.

2. Open the operating account. The Novo application is designed to be quick to complete online. You'll need your EIN, formation documents, and personal ID. Deposits at Novo are FDIC-insured through its partner bank, Middlesex Federal Savings, up to the standard $250,000 per depositor, per insured bank, per ownership category.

3. Open the IOLTA at a state-approved institution. Check your state bar foundation's website for the approved list. Bring your bar card, formation documents, and EIN. The bank will handle the paperwork that authorizes interest to be remitted to the state IOLTA program.

4. Connect accounting software on day one. Link Novo to QuickBooks or Xero before your first deposit hits. Deposits, expenses, and transfers can then import into your books with less manual cleanup at month end.

5. Issue separate cards for expense categories. Novo lets you create virtual cards. Use one for CLE and bar dues, one for court filing fees and PACER, one for software subscriptions (Clio, Westlaw, Microsoft 365). When you review the statement, expenses sort themselves.

6. Document your trust accounting procedure. Write down, in plain language, how client funds come in, where they sit, how you record them in your subsidiary ledger, and how they get disbursed. If your state bar audits you (random audits happen), you hand them the document and the reconciliations.

Trust accounting procedure template

Use this template as a starting checklist, then confirm state-specific deadlines, retention periods, and wording against your state bar's trust accounting guidance before adopting it.

SOLO PRACTICE TRUST ACCOUNTING PROCEDURE

Firm: [Firm Name, PLLC]
IOLTA bank: [Bank Name] — Account ****[last 4]
Operating bank: Novo — Account ****[last 4]
State bar rule reference: [State] Rule of Professional Conduct 1.15

RECEIVING CLIENT FUNDS
1. Deposit all client funds (retainers, settlement proceeds, filing 
   fee advances) into IOLTA within [state-required timeframe, e.g. 
   3 business days].
2. Record deposit in subsidiary client ledger with: date, amount, 
   source, matter number, purpose.
3. Never deposit client funds into the operating account.

EARNING FEES
1. Perform work and record time in practice management software.
2. Issue invoice to client showing fees earned against retainer.
3. Transfer earned amount from IOLTA to operating account within 
   [state-required timeframe].
4. Record transfer in subsidiary ledger.

DISBURSING TO THIRD PARTIES (court, experts, medical providers)
1. Confirm client has sufficient balance in subsidiary ledger.
2. Pay directly from IOLTA to third party.
3. Record in subsidiary ledger with payee, matter, purpose.

MONTHLY RECONCILIATION
1. Reconcile IOLTA bank statement to firm's IOLTA ledger.
2. Reconcile firm's IOLTA ledger to sum of client subsidiary ledgers.
3. All three must match. Document and sign the reconciliation.
4. Retain reconciliations for [state-required retention period, 
   typically 5–7 years].

PROHIBITED
- Paying firm expenses directly from IOLTA
- Leaving earned fees in IOLTA beyond required transfer window
- Holding personal funds in IOLTA beyond bank minimums

Confirm each bracketed detail against your state's Rule 1.15 guidance and your bar foundation's trust accounting handbook before signing it into use.

Frequently asked questions

Can I use Novo as my IOLTA account?

No. Novo does not offer IOLTA accounts. IOLTA participation requires a bank-specific agreement with your state's IOLTA program. Solo lawyers use Novo as their operating account and open an IOLTA at a financial institution approved by their state IOLTA program.

Does Novo accept sole proprietors, or do I need an LLC or PLLC?

Novo accepts sole proprietors as well as LLCs. Most solo lawyers operate as a PLLC or PC because law is a licensed profession. Verify current entity eligibility on Novo's application requirements page before applying.

Does Novo integrate with Clio?

Novo integrates with QuickBooks and Stripe. For current Clio and Xero integration status, check Novo's integrations page, which is updated as new partnerships launch. If direct integration isn't available yet, you can still connect Novo transactions to Clio through QuickBooks as an intermediary.

What's the difference between an operating account and a trust account?

The operating account holds firm money: fees you've earned, expenses you pay, and your own working capital. You spend from it freely. The trust account (IOLTA) holds client money that isn't yours yet, including unearned retainers, settlement proceeds pending disbursement, and filing fee advances. You cannot spend from it for firm purposes, and interest earned on the pooled IOLTA is remitted to the state IOLTA program to fund civil legal aid.

How is Novo FDIC-insured if it's not a bank?

Novo Platform Inc. ("Novo") is a fintech, not a bank. Banking services provided by Middlesex Federal Savings, F.A., Member FDIC. Deposits are FDIC-insured through Middlesex Federal up to $250,000 per depositor, per insured bank, per ownership category. That is the standard FDIC limit that applies to any insured US bank.

How much does an outgoing wire cost at Novo?

Wire and ACH pricing changes, so check Novo's current fee schedule before you plan a settlement disbursement. Incoming wires are free. Confirm outgoing wire fees and same-day ACH pricing on Novo's pricing page.

Can I deposit cash retainers into Novo?

No. Novo does not accept cash deposits. If your clients pay by ACH, card, or check, Novo can still serve as the operating account. Cash retainers require a bank that accepts cash deposits, so you would need to deposit those funds at a bank that does, subject to your state's IOLTA rules on how client cash is handled.