Well - besides the issues of the Paladin code making working with an evil character iffy (I know Pathfinder is less absolute on it) it depends upon the evil character and just what sort of evil they do. That's why I specifically noted "THAT evil". If a character is only borderline evil (like most lawyers :P) then it can certainly work. However, I think that in 3.5 they mention that becoming a lich means the sacrifice of bunches of sentient creatures. The kind of character who wants to do that is an entire other kind of evil.