James has impressed under the watchful eye of Chelsea boss Emma Hayes this season, scoring seven goals in 20 appearances in all competitions.
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She played a key role in the Blues' victory over Manchester United in a top of the table clash in the Women's Super League at the weekend, with her stunning ball forward releasing Sam Kerr to score the only goal of the game.
Many full-backs have struggled to deal with the 21-year-old's powerful runs and her sensational strike against Tottenham Hotspur recently just highlighted the forward's natural ability.
James' excellent form this season has meant she has firmly cemented herself in Sarina Wiegman's Lionesses squad and she scored her first international goal against South Korea in the Arnold Clark Cup last month.
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The forward looks set to be a key part of the Lionesses side at the World Cup in Australia and New Zealand this summer and former Chelsea defender Rafferty has warned WSL defenders that there's even more to come from the England international.
Speaking exclusively to talkSPORT at a Chelsea Foundation event, Rafferty said: "We all saw her potential from a young age. I think she has got quite a lot of expectation on her shoulders. It's about that mentality and I think that's where Chelsea have allowed her to flourish, because everyone around her are winners.
"They will help her get to where she wants to be and the quality within the training ground and every day in training, that's what can elevate her levels. I'm expecting a lot more to come from Lauren James.
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"Physically, she makes small little movements that are quite difficult to mark and she's got a turn of pace that you don't really expect. I think some defenders try and stand off, which is not a great way to go! If I was one-on-one with her, I would just put an elbow in I think!
"She's unpredictable and that's why she's so dangerous and I'd like to see that continue. Sometimes, you can almost train that out of someone, but you don't want that from Lauren James. She's fearless. That is quite scary to defend against.
"I think she has potential to change games, so I think it's about her consistency [now]. I know she's been criticised a little bit for slight immaturity around [her] defensive roles. But she's young and that will come.
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"I think the development of her whole game is what will happen under Emma Hayes and the coaching staff. For the future, I think it's a scary prospect because she can change games, she can affect the defence, she can split passes, she can drive at players and she can finish. If she continues to progress, the world is her oyster."
Chelsea's victory over United moved the Blues back to the top of the table and means they are on course to win their fourth WSL title in a row.
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Not only do the Blues have the best squad in the league on paper, but they also have the best coach in Hayes and Rafferty couldn't speak more highly about her former manager.
"I can't speak highly enough of Emma Hayes to be honest," Rafferty finishes.
"She's quite blunt and brutal, but that's when you're winning and losing as well. You know exactly what your role is and you know when you've done it right or wrong and I think the way that she can galvanise the team [is one of her main strengths].
"Each player knows their roles inside and out and tactically, there's always several plans in place. I'm actually really proud to have played under her.
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"I think it's about the depth of the squad and the mentality and I don't think any team in this league can beat Chelsea's mentality."
Listen to Women's Football Weekly every Monday on talkSPORT2 from 7pm.