From Mumepedia

LOCKPICK IMPROVES

Your lockpicks can be improved to work faster and better. Around Arda you will find people who can help you improve your lockpicks, these are the ones I've found so far. In most cases you can ask about lockpicks, and the mobile will begin talking. Once a set of lockpicks has been improved, a new line will be added to their description. To view this description - examine lockpicks.

1) Assassin Guildmaster. Price - 15 gold. Description: Two of the lockpicks have shallow notches on them.
2) Master Assassin. The Master Assassin will improve lockpicks as a reward to the person who kills Malardil and brings the silver key to him. Just approach the Master Assassin with the key in your inventory, give him key after he asks for it, and remember to stay cool. Remember that you must be neither invisible nor sneaking while passing doorguards and entering MA. His reward is random: he always gives you 3 gold, then sometimes he gives you small pouch of paralyse, sometimes offers you picks upgrade (give him picks _after_ that). Btw it is also very easy to steal his own picks after getting your picks upgrade or pouch ;) Like 80% steal needed. Description: A couple lockpicks have a small bump near the tip.
3) Angdil. Price - an evil artifact weapon (HBM, ElfHewer, Morgul Blade, HFS, Black Many-Tailed Whip) or Morgul Blade's sheath. Description: The edges of most picks have been carefully sharpened.
4) Dwarven Locksmith (dwarf only). Price - pure Truesilver: a piece of mithril (silvery metal), mithril key (Muranog cabinet) or fine chain piece. White chain doesn't fit! Description: The lockpicks are extremely well tempered.
5) Kraksh the Orcish Scout Guildmaster (orc only). Price - a precious jewel (corberyl+ works, opal- doesn't, didn't tested topaz). Description: There is a strange lockpick, with a sharp protrusion on one side, in the set.
6) Grey Cloaked Man (BN only). Price - oak staff from a slain whitie. Description: The lockpicks feel oddly light in your hand.
7) Half-elven cut-throat. To get upgrade, give lockpicks to him - no messages like "he starts working on picks" or whatsoever. He does, and (btw) immediately! Kill him (or steal) to get picks back. It's better to give him tons of picks at one time - just to save yourself from excess trips to his hideout. Free. Description: Several of the picks have long, smooth grooves along their length.