Oh yeah, you've got to go full chaotic evil for the lich. I revived Staunton Vane (it's been a while now, that's the dwarf with the tragic backstory who works for evil woman whose name I've forgotten I believe) as an undead, I had a few lich only companions who were undead (they don't talk much though, most of them whine about being controlled if I remember right), my city was dark and almost desolate, filled almost entirely with undead subjects. My councillors, the ones still alive, were a bit terrified and hopeless. By the end my Lich was so good at supporting the undead characters that I started to just go with a full undead party. Poor enemies must've been terrified.

It was incredibly macabre and grim, of course, but it was so damn cool.