Legal Question in Immigration Law in California

You do not need to do so, and doing so will incur additional filing and attorney fees. However, as a matter of caution, in the event that situations change between now and a priority date becoming available, continuing to extend your H-1b status will leave you in a far better position. If the priority date is likely be become current within the next year or so, it may be fine to forego the extra expenses and time on another H-1b extension. However, if you are looking at a potentially longer priority date wait, it would probably be prudent to go ahead and keep the H-1b going.

You cannot become ilegal in the USA until your priority date is current, you file for adjustment of status and obtain a work permit. You might be able to waive only up to 180 days between the time your visa expires and your adjustment is filed otherwise you might loose the right to adjust if you fall out of status.