Sales department, new business, development department - these nice people are called differently in different agencies. Why are they needed? Very simple.
If you have a project, you can carry it out well and show off your professionalism. Or fail and ruin the relationship with the Client. Or spend it in the middle. Show high profitability or low. Hire freelancers or do everything yourself. Make it a good design or a crappy one. You can be creative or make it formulaic. You can pay generous bonuses to the team or squeeze everything. You can make a masterpiece, you can make a hack, make it with big or small forces, quickly or slowly, masterfully or clumsily, good or bad. You can do it in different ways.
That's all - if you have a project...
But if you don't have a project, you won't make a project at all.
The development department is needed so that there are projects at all. That's why these people are so important to any agency.