There's an example of a dropcap in the TeXbook but it invokes \lineskip because of the big letter, and so makes it hard to stay on the grid. Another solution is to first skip down a few lines, place a big letter in a box of zero height, and then skip back up again and shape the paragraph with \parshape.

It could look something like this:

\font\tenrm "EBGaramond12-Regular" at 10pt \tenrm
\font\tensc "EBGaramond12-Regular":+smcp; at 10pt
\font\quotefont "EBGaramond12-Regular" at 23pt
\font\dropcapfont "EBGaramond12-Regular" at 46pt

Lorem ipsum dolor sit amet, consectetur adipiscing elit. Ut ut cursus ipsum, feugiat accumsan mi. Pellentesque sed ante ac augue tincidunt ultricies. Mauris vehicula ipsum est, nec bibendum odio semper sit amet. Aenean fringilla purus est, ut varius enim consectetur non.

\vskip2\baselineskip
\smash{%
    \hskip0pt % For moving the cap into the margin.
    \raise 15pt \llap{\quotefont “\hskip0pt}%
    {\dropcapfont N}%
}%
\vskip-3\baselineskip
\dimen0=35pt % First line indent
\dimen1=38pt % Second line indent
\dimen2=38pt % Third line indent
\parshape 4
    \dimen0 \dimexpr(\hsize-\dimen0)
    \dimen1 \dimexpr(\hsize-\dimen1)
    \dimen2 \dimexpr(\hsize-\dimen2)
    0pt \hsize
\noindent
{\tensc ullam,” auctor quam eget porta feugiat.} Suspendisse mattis fringilla turpis, vel hendrerit orci hendrerit nec. Donec vel nisi vestibulum, placerat leo in, tempus nisi. Sed non lacus id velit accumsan ullamcorper. Nulla eget risus ex. Pellentesque faucibus sit amet orci a fermentum. Quisque finibus turpis quis elit lobortis, sed viverra erat eleifend. Nulla imperdiet felis ac augue fermentum, in tincidunt nibh pellentesque.

If you have fancy dropcaps with foreground and background like in EB Garamond you can layer the caps with an \rlap to make something like this: