Chelsea, who trail 2-0 from the first game at the Santiago Bernabeu, are on a six-match winless run, with interim boss Lampard losing his first three games in charge.
With Chelsea 17 points off the Premier League top four despite spending more than 600 million euros on players, winning the Champions League is their only realistic chance of qualifying for the elite competition next season.
The situation is similar to when Chelsea finished sixth in the league in 2011/12 when Lampard was a player at the club and they qualified for the Champions League by winning the trophy.
"We're not where we want to be. I think the word 'broken' is a bit much. The league position is reality and we are 2-0 down (against real)," Lampard said ahead of Tuesday's second leg.
"We have to work against that, I don't think anything that happens tomorrow will be better than when we won the Champions League (in 2012).
"It's down to us as a team to play with desire and know-how to turn this game around. I've been here too many times on a Champions League night not to understand that the atmosphere is going to be great. It is down to us to engage the crowd."
Lampard said he would have no problem should Chelsea fail to advance as he was proud to manage the club.
"What will be, will be after tomorrow," he added. "Every game is an opportunity to win games ... an opportunity to get back to winning. Every game is and should be a huge game."
BOEHLY WELCOME
British media had reported that an upset Boehly had come into the dressing room after Chelsea's 2-1 weekend loss at home to Brighton & Hove Albion to talk to the squad and Lampard said he was comfortable with the American's involvement.
"I think there was some criticism of our old owner (Roman Abramovich) for not coming to games and being around. That wasn't always true, to be fair," he said.
"When an owner is invested in helping the team, it is their prerogative to have the input they want.
"I'm not going to say what he (Boehly) said but it's normal when he comes to the changing room."
Real's former Chelsea manager Carlo Ancelotti said club owners have the right to enter the dressing room to talk to the players and their presence can be a good thing.
"I think this can motivate the players. Chelsea are not going through a good moment and it can inspire the players to play better," he told a later news conference.
"It's a good gesture especially if Frank doesn't mind. If the chairman came after every game I would feel comfortable. He has the right to know the reasons for the manager's decisions."
The Madrid boss said that despite Chelsea's poor performance at the Bernabeu they still have an opportunity in the tie.
"We can be lucky enough to play another semi-final and another final but we have to take it step by step. If we reach the semi-finals, we will have done well," Ancelotti added.
