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We tend to think it's essential, but honestly it really depends on what kind of client you're after.
I have friends who work in design and the ones making the most money are actually the ones with decent online presence showing their work, but there's also people who live purely off referrals and personal recommendations without any website at all.
A portfolio helps a lot if you're just starting out or want to attract new clients, but it's not a guarantee if your work isn't actually good.
Personally, I see a lot of value in it too, but what nobody mentions is that an abandoned portfolio does more harm than having none at all - if you leave three outdated projects there with no updates for months, the client thinks you're not working anymore.
The website needs to stay alive, new projects regularly, otherwise it's better to just invest in Instagram or Behance where the algorithm does part of the work.
It makes total sense to have an online portfolio. That said, the detail nobody talks about is that you need to keep it updated and well-made - an abandoned website or one with old/bad work is worse than having nothing at all, because it gives the impression that you're stuck in the past or don't care about what you do anymore.
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