Collections are an alternate way to organize (and far superior in my opinion).They are not required. Collections are created independent of where an image is located, and can be created by physically dragging photos into a collection manually, or can be created via metadata, such as Camera Maker, Date, Lens type, etc.

I recommend you keep your existing structure, at least until you decide how you wish to organize in Lightroom. Lightroom does not care where your images are, they can be managed regardless. If you wish to carefully organize and name your folders, you can happily do that in Lightroom. If you wish to put all your images in one giant folder, and tag the images in some other fashion, Lightroom is just as delighted to help you. You can later try out Collections, see which method works for you.

An important consideration is that data provided to you the user via folder names does not exist within the image or Lightroom catalog. In other words, if you have an image in a folder called 2015>Leica>Beach>Daughter>, if you export the image to Flickr, there will be no information about Beach or Daughter in the image. (Date and Camera maker will probably be there from the camera itself)

However, if you use Tags within Lightroom, this data is embedded within the photo (if you choose) and this same data can be used to create Collections, which is an alternative way to organize in Lightroom. Smart Collections are those that organize themselves based on Rules you can easily create. For example, you may wish to create a Smart Collection for all images taken with your Leica, etc.

Personally, I import all my images into dated folders, automatically created by Lightroom. Organization beyond date is done via Collections and Smart Collections. Any events or subjects I wish to view are done via collections. Since I often associate events with dates, I use both to find photos (I remember that I went to the beach in June, etc). I create the tags on import to make it simple.