Hedgehog in the Fog suggested completing an additional quest and getting Phoenixes. They only gave 5 Phoenixes (or 4) – is that really helpful when Nicholas already has 20,000 archers?! And if you rush to fight Nicholas within a month, he still respawns in other cities and, it seems, without significant losses... :( I'm starting to feel like giving up on the campaign...
Apparently, the only solution is to take and develop Dark Magic as a skill, just like Hedgehog did.