Clarke and Lambert were briefly team-mates nearly a quarter of a century ago at St Mirren and will now cross swords in the dugout for the first time at Villa Park.
Albion have made a flying start under Clarke with 10 points from the opening five games of the campaign.
But Clarke has noted the gradual improvement in Villa's fortunes including the 4-2 midweek win at Manchester City in the Capital One Cup.
He said: "We've had a good start and Villa have had an okay start. You can't say they've had a bad start.
"They've had enough decent results to show what Paul is trying to do there is starting to work. Their trend is upwards.
"I've watched a few of their videos leading into this match and you can see the team is starting to play the way Paul would like them to play."
Albion finished above Villa in the Premier League last season but Clarke said "only time will tell" whether that will become a regular occurrence.
He said: "Last year was good for the Baggies fans that they managed to get the local bragging rights.
"I've been involved in the Merseyside and the Tyne-Wear derby so I understand the passion of the supporters.
"This season is completely different. The first derby game could be crucial so we need to know we go there knowing we need to put on a good performance.
"Villa had a fantastic result midweek whereas we had the reverse (against Liverpool).
"We have to try and overcome that and go there and put in a good performance and bring back a good result."
Clarke is aware for the need for his players to keep a cool head on Sunday.
He said: "It is going to start frantic, it is going to be passionate, the crowd will be really involved.
"It is important for the players to have a cool mind. You have to be passionate, put your foot in and make the tackles.
"But at the same time you have to have a cold mind and be ready to play the football.
"Probably the first team to put their foot on the ball and make some passes will be the team that gets the best start to the game."
Clarke is unsurprised Lambert has carved out a successful managerial career after seeing him break into the St Mirren side as a teenager.
He said: "Paul was an apprentice at St Mirren and just coming into the team as I was looking to get out of the club. I was linked with move after move.
"There is the story that he cleaned my boots and didn't get a tip at Christmas. But in those days you didn't have a dedicated boot boy. I was on £25 a week so had no change left to tip him!
"Seriously, it is always difficult when talking about a 16-year-old boy to say if he will go on to be a good manager but I would say he was always a serious professional.
"When he came into work, you could tell he had a good attitude, wanted to do well all the time, demanded high standards from himself.
"Looking now, you would say that is one of the traits you want to become a coach or a manager. It doesn't surprise me he has gone on to have a good career as a manager."
Summer signing Goran Popov could make his first Albion start after training for the past two days following a groin problem.
Fellow full-back Liam Ridgewell - a former Villa player - is also making good progress with his thigh problem while midfielder James Morrison (hamstring) is also likely to be available.