[Melusine]

Cast Resist Fear (2nd level Mage spell or 1st level Priest Spell) to prevent your characters from running. The 5th level Priest Spell Chaotic Commands is very useful to resist stun and chaos. Bolt of Glory (6th lvl Priest spell) does lots of damage to demons (which is what Balor is) and Holy Smite (3rd level priest spell) will work as well. Try using weapons that give you a mindshield (such as Lilarcor) and have at least +3 to hit. There are a few weapons in the game that do extra damage to demons, Jerrod's Mace for example, but if you don't have any of them, just use the best weapons you have.
Have your mage cast multiple Lower Resistances (5th level Mage spell) at the demon followed by any type of damaging spells (Magic Missile, Chain Lightning etc)