Personally, I'm at 4 for PvE and 3 for PvP.

PvE - Have a high quality squad, a squad full of lowbies for when I use my story skips, one designed for the 2-chain quests (thief (steal CT), time mage (haste), Mont Murmur Baelo for both slash and earth funsies), and one for when I'm auto farming (mix of high quality lowbie, for any of JP/resonance/affinity/etc). 5th slot is freeform, like when the storyline quest calls for only Water units or somesuch.

PvP - An attack squad (contains unit for bonus), defense squad (since bonus unit is slightly weaker) and Match because tanks are silly there. Will sometimes accidentally leave up the Attack or Match teams but I tend to settle around #5000 anyways, so whatever.