the best use for a familiar is sticking it in your capital so you can cast strategic spells (with cooldowns) twice

This questions has been asked a couple of times now.

Trojasmic  is right, the best use for it is for strategic spells and summons.  As it will in effect double the number your sovereign can cast.

In tactical combat they suck. For a unit which is really only a caster they

- are put right at the front and seem to be the preferred target of enemies.

- are an expensive tactical caster due to not getting any of the item or spell or trait effects that help reduce spell casting cost. 

- can have problems with spell resistance due to not getting any of the item or spell or trait effects that help increase spell mastery. 

I have played with it a couple of times in LH and do not think it is really worth the point cost in sovereign creation. Perhaps if they added it to the summoner profession, the shadow warg is helpful at the start while the familiar is more helpful latter on once the warg starts to lose its usefulness.

At least your sovereign is no longer losing base HP every time you cast it.

The familiar doesn't count as a hero, so it doesn't leech experience away from your army leader. You need to use the familiar in an army with a hero/henchman who has the Command skill and a sword, so they can command the Familiar to move to the rear and cast before the enemy does (or increase initiative of your other units so they can move forward first). Don't use the familiar in battles against ranged enemies. Against many wildland armies or Yithril, it works fine. Because of its low movement, keep it on established road networks with other 2-move units.

When the Familiar levels up, it gains 2 hp and 1 mastery (starts with mastery = 70). Once you have researched Touch of Darkness spell, you can trade hp for mastery. So by level 7 or so, you can get the familiar up to about 90 mastery, which is respectable. At that point its should work ok as a combat caster for your less expensive battle magic. 

If you're powerful enough to keep your Familiar alive that long (lvl 7), you could've just defeated all opponents instead of wasting all those actions and mana on your Familiar.

The Familiar casts summons at 7 or 8 levels lower than your Sovereign. If those weaker summons are still cost-effective, your 'normal' summons must be very powerful indeed.

It's a special Sov only spell (and has a tag to indicate it's Sov only), so I guess that includes (or excludes depending on how you look at it) the familiar.