how do i deal with Arch Demons doing 'half'?

[KongMysen]

Or you you can "solve" the halving by casting Time Back. Excorsism and pain mirror works great too.
If you don't have timeback and your troops are smaller than the enemy Arch Demon, follow DGDobrev's advise and return later.

In combat just focus fire on them the first few rounds and they won't cause the same threat once their numbers have been downed to lower leadership than your own troops