I've run a 4-caster-party.Offensive spell's do not become useless at AP (on normal; you won't use fireball, noxious fumes etc. anymore, though), but their use is diminished. I've used Mind Flay, Tsunami, Earthquake, Crush, Falling Stars, Might to Magic and Psionic Blast (because it's the only Group damage spell) until the end. Instant death spells are pretty useless (unless you face tons of low level monsters, or they're especially weak against the respective element), Death Bomb is an exception.
You will have high power cast for everyone, including the priest, won't you?
Give you Alchemist & Priest a Shield and put them in the front. Give your priest a mace, and your alchemist a dagger (I tried wand, finished the game with winter wand, but, looking back, would have much preferred a stilletto or the Canezou Dagger). You'll need the shields for defence. Psionic and Mage should stay in the back, with staffs (Staff of Doom, Flame Staff, Ebon Staff are all candidates).
As for stats:
Everybody: Intelligence
Mage: Speed (my element shield caster)
Psionic: Senses (soul shield caster; artifacts/mythology/communication champion)
Priest: Strength, Vitality
Alchemist: Dexterity (Refextion)
Worked out well.