Hopefully, you saved a Scroll of Freeze, to freeze the lich otherwise he's going to strike you with Lightning Bolts (unblockable). Kill him fast!!
If you have spare points, get the Flame Arrow spell and, if possible, Fireball spell too. The final battle will be much easier with those spells.
This last battle is pretty simple. Slash away at Arantir, wait for him to summon his little Pao Kai and Fireball it to death. If you did not use your spare skill points to get Fireball, you're gonna have to resort to archery.
Also, sprint forward when the Pao Kai sends out a lightning bolt at you. This way you'll dodge it most of the time, and never let your health go lower than 50, always heal yourself. That's pretty much it.
Congratulations on beating the game =)