To lack something is just not to have it. 'I'd like to go to the concert but I lack the money.' (That's a pretty unlikely sentence but you get the idea. ) A better example: 'Thousands of people in Japan lack fresh water.'*
To be lacking is not to have something that you should have or might be expected to have. Usually, but not always, an adverbial phrase is added to show which quality (it's usually a quality) is deficient: 'He is lacking in a sense of propriety.'. The 'in' just expresses a way in which you're lacking: 'It just calls for a little commonsense, but in that he is sadly lacking.'
*In contrast the people in Japan are not lacking in fresh water; they just lack it.
- For Teachers