vgersh99, with your solution I get this:
Code:
$ nawk 'BEGIN {FS=RS=""; ORS="\n\n\n"} $1=$1' file
T h e f i r s t l i n e .
S e c o n d l i n e .
F i r s t l i n e o f t h e s e c o n d p a r a g r a p h .
S e c o n d l i n e o f t h e s e c o n d p a r a g r a p h .