Why you need a portfolio
A portfolio is a showcase for your talent and experience - whatever your creative or media field.
As you move from job to job more frequently by nature as a freelancer, your portfolio will become your strongest selling tool. It will enable you to demonstrate past successes in why you were a useful or profitable resource (be that in adding value, increasing sales or readership, changing company perception or organising publicity).
Examples of your work can be shown digitally or as a traditional portfolio. Evaluate the work you plan to show a client, then cut it down: show a range that demonstrates how rounded your skills are. Tailor example of your work to, what you know, suits the company you are approaching and make sure everything in your portfolio is the very best you're capable of.
If you are a creative freelancer, prospective clients will expect to see a portfolio. In other fields such as publishing and PR, while a portfolio certainly isn't a necessity, additional elements are used increasingly to supplement CVs. If you are a management consultant it is still important to find a means to demonstrate objectives met and how you met them.
If you are just starting out you will still need to demonstrate your ability. How you present your own services to prospects is the obvious first example (if you are a designer your business card and website obviously need to reflect this. If you are a copywriter the copy on your website needs to be second to none).
If you lack commercial experience you could try approaching local companies and offering to work for free. If you choose who you approach carefully you should be rewarded with a portfolio example that highlights your talents and better still further, paid for, work from that same company if you impress. For example, if you are a web developer, spend time researching local companies to find one that has a good business presence offline but fails to maximise enquiries online through the bad layout. You may not only be granted ongoing maintenance work to sustain success but will have a great looking website to sell yourself with, backed up with the hard facts such as increasing online sales by a certain number. Having the highest ranked search terms amongst competitors etc. You could also request adding 'Developed by www.yourdomain.com' to reap a further return.
Another alternative is to approach not-for-profit associations who are often strapped for cash and may give you a little more leeway creatively.
If you are presenting your portfolio at an interview rehearse your timing so you can fit in showing all examples in your portfolio. Consider asking ahead about the length of the interview if you are unsure.
Practice presentation skills which demonstrate your thought processes.
Keep your portfolio up to date. Samples of work, client compliments, or press coverage of an event you spoke at will show potential clients your talents. Outdated work samples not only won't help your case demonstrating your suitability for a role, it will highlight how badly organised you are.
More on starting out as a freelancer.