Few pastors want to spend their time on such seemingly mundane things as bylaws and church governance. Most pastors would, instead, rather being doing the ministry activities to which they feel most called: visiting with families, praying with hurting people, preparing sermons, and mobilizing volunteers.
But when trouble strikes, the first thing many pastors think is: "I wish I had spent time drafting some better bylaws for our church!" Why? Because bylaws help lay the framework for what happens in the church--both during good times and bad.
A good way to think about this is that bylaws are somewhat like the rules for a board game. People can play the game without having the rulebook handby, but doing so can lead to a lot of strife: what is supposed to happen when you land on a certain square? How much of a penalty should someone receive for doing XYZ? How much time does each player have? Questions like this can be important in allowing the players to have fun and follow a set of standard guidelines while playing the game.
In the same way, Bylaws merely provide the rules for how the "game" is played in church governance. Bylaws typically state who can be members, what rights they have, and how membership may be terminated in dire situations. Likewise, Bylaws deal with the employment relationship with the pastor: how the pastor is hired, what his duties may be, and what happens in the unfortunate situation that it is necessary to terminate his employment. A good set of Bylaws will give a written roadmap for how to deal with these potentially divisive situations (and many more, including financial issues, committees, budgets, meetings, and more). In divisive situations, if the church has a good set of Bylaws, these "rules" allow all of the parties to feel good about the fact that there are definable, reasonable standards for how to operate. Rather that argue about the "rules," the people can focus on the task at hand: fixing a sticky situation in a Christ-like manner.
So does your church need Bylaws? The answer is: Yes, you need the best Bylaws you can get. By spending the time to think through how you set up your "rulebook," you can avoid a lot of headache down the line, and create an atmosphere of transparency and reason.